1. Starting colored pages - Bombay Stock Exchange · Email: [email protected] Group Chief Financial Officer N. K. Nolkha Auditors Jitendra K. Agarwal & Associates 5 A, Nandalal

KCI

ANNUALREPORT

2017-18

ANNUALREPORT

Company Secretary

N.K. Sethia

Registered Office

'Park Plaza' 71, Park StreetKolkata – 700 016

CIN: L24110WB1960PLC024910Phone: +91-33-40313200 | Fax: +91-33-40313220

Email: [email protected]

Group Chief Financial Officer

N. K. Nolkha

Auditors

Jitendra K. Agarwal & Associates5 A, Nandalal Jew Road

Kolkata - 700 026

Bankers

DBS Bank LimitedHDFC Bank LimitedYes Bank Limited

2017-18

Kanoria Chemicals & Industries Limited

BOARD OFDIRECTORS

Mr. R.V. Kanoria Mrs. M. Kanoria

Mr. H.K. Khaitan Mr. Amitav Kothari Mr. Ravinder Nath

Prof. S.L. Rao Mr. A. Vellayan Mr. S.V. Kanoria

Annual Report 2017-18


Mr. Sidharth K. Birla

Mr. G. Parthasarathy


TABLE OFCONTENTS

CHAIRMAN'S STATEMENT

THE YEAR IN REVIEW

NEW FRONTIERS

VALUE

DIRECTOR’S REPORT

REPORT ON CORPORATE GOVERNANCE

GENERAL SHAREHOLDERS’ INFORMATION

INDEPENDENT AUDITOR’S REPORT

BALANCE SHEET

STATEMENT OF PROFIT & LOSS

STATEMENT OF CHANGES IN EQUITY

CASH FLOW STATEMENT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF PROFIT & LOSS

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

03

04

07

09

12

34

43

50

56

57

58

59

97

98

99

100


CHAIRMAN’S STATEMENT

The global economy is picking up with signicant improvement in global

trade and investment recovery in advanced economies.

The Indian economy continues to improve its growth trajectory. This is

reected in improvement in trade and strengthening private

investment. Ination has been under check and the new scal

environment promises good dividends.

We, however, have to remain cautious about the rise in oil prices which

creates a negative pressure on the balance of payments and could lead

to pressure on the value of the Rupee.

The majority government at the Centre is in its fourth year. During this

time it has taken signicant steps including rationalization of taxation. It

has also effectively tackled the long pending issue of nonperforming

assets in the banking sector. The introduction of Goods & Services Tax

(GST) and the Insolvency & Bankruptcy Code (IBC) will have far

reaching positive impact. Both the GST and IBC are, however, in a

nascent stage and the government has to be sensitive to make sure that

required modications and corrections are done timely and effectively.

During the year under review, the performance of the Company

remained under pressure. The future, however, is looking much brighter.

The chemicals business suffered from uctuating commodity prices,

particularly in inputs required for the products of the Company.

It is heartening to note that both plants of the Company in Ankleshwar,

Gujarat and Vizag, Andhra Pradesh continue to run efciently. As a

result, we have been able to withstand pressures in the market. The

Company is now looking to add a third location for a new plant in Andhra

Pradesh.

The performance of our automobile electronics business in Europe has

been exceedingly good and strategic initiatives have proved to be

rewarding. In a span of ve years the turnover of this business has

increased by over 250%. The bottom line is also showing

commensurate growth. In order to expand the business, another plant is

being set up in Windsor, Canada to cater to the North American market.

The entire automobile electronics business is carried out by APAG

Holdings under APAG Elektronik AG.

The Denim plant in Ethiopia is now showing signs of turning the corner.

The most difcult issues of labour turnover and inconsistent quality

have been largely overcome.

In order to align the product mix to current market requirements, some

fresh investments are being made to add a ring spinning section. The

Company is also getting into integrated manufacturing by adding

garmenting in a small way. The losses of last year are much lower than

previous years and further improvement is expected next year.

Moving forward, I am optimistic on the future course of economic

developments and combined with our initiatives I also remain condent

about the Company's performance in the coming year.

I am grateful to the dedicated team in the Company and all its

subsidiaries who have untiringly worked in challenging circumstances

to bring back the Company into a prot on a consolidated basis.

R. V KanoriaChairman & Managing Director


Annual Report 2017-18 3


THEYEAR INREVIEWDuring the year 2017-18, the Indian economy witnessed improvement in its growth trajectory. After a brief slowdown in the rst quarter, GDP growth is back on track and India continues to be one of the fastest growing economies in the world.

While ination has been under check and private investment on the upswing, there is still some cause of concern on rising oil prices and the pressure it could create on the balance of payments and, in turn, on the value of the Rupee.

Signicant policy measures were taken during the year towards rationalization of taxation. Introduction of the Goods & Services Tax (GST) is expected to have considerable positive impact on businesses and the economy. At the same time, addressing the persistent problem of nonperforming assets in the banking sector through the introduction of the Insolvency & Bankruptcy Code (IBC) should further strengthen the economy.

The Company continued to build its strengths on the foundations of a constant vigil on costs, good governance, ethical business practices and sustainable policies.

The diversication initiatives of the Company are described in the subsequent section titled 'New Frontiers'.

MANAGEMENT DISCUSSION & ANALYSIS

Financial Performance with respect to Operational Performance

The performance of the Kanoria Chemicals Group (consolidated), during

the year under review, has shown signicant improvement due to better

efciencies and strategic initiatives.

The nancial performance of the Company, however, remained under

pressure due to volatility in the prices of key raw materials. The impact of

this to some extent was mitigated by improved production efciency in

Alco Chemicals segment. The Revenue from Operations, excluding excise

duty applicable till June 2017, increased by 15% from Rs. 2,957 million in

the previous year to Rs. 3,387 million in the current nancial year. The

Prot before tax decreased from Rs. 91 million to Rs. 82 million. The Prot

for the year was at Rs. 56 million and Earning per Share was at Rs. 1.28 as

compared to Rs. 4.28 in the previous nancial year.

APAG CoSyst Group engaged in Electronic Automotive segment under

APAG Holding AG, the Switzerland based wholly owned subsidiary of the

Company, continued to yield rich dividend from strategic initiatives taken

in its various group companies. The Revenue from this segment increased

by 15% from Rs. 3,615 million in the previous year to Rs. 4,152 million in

the current nancial year. APAG CoSyst Group earned a prot of Rs. 165

million during the year as against a loss of Rs. 25 million in the previous

nancial year.

Kanoria Africa Textiles plc (KAT), another foreign subsidiary of the

Company based in Ethiopia has also demonstrated improved

performance and efciency notably at production and quality levels in its

second year of operations. Revenue from this segment increased by 84%

from Rs. 449 million in the previous year to Rs. 828 million in the current

nancial year. KAT incurred a loss of Rs. 116 million during the year as

against loss of Rs. 418 million in the previous nancial year.

The Consolidated Revenue from Operations, excluding excise duty

applicable till June 2017, grew by 19% to Rs. 8,368 million as against Rs.

7,020 million in the previous nancial year. The consolidated prot for the

year was at Rs. 116 million as against a loss of Rs. 237 million in the

previous year. The total comprehensive income at consolidated level

attributable to the Shareholders of the Company was at Rs. 117 million as

against loss of Rs. 144 million in the previous year.

Alco Chemicals Segment

Industry structure and development

The Alco Chemicals Division of the Company produces Formaldehyde and

other value added products, including Pentaerythritol, Hexamine, Sodium

Formate, Acetaldehyde and Phenolic Resins.

The Company's choice of technology for the Formaldehyde plants uses the

FORMOX process, which ensures lower operational cost and higher



Performance

The operations of the Alco Chemicals Division remained stable during the

year. Production and sale of products of the Division improved over the

previous year.

Outlook

Ÿ Higher growth in the manufacturing sector expected to improve demand for Alco Chemicals in the country.

Ÿ The Government's focus on infrastructure and affordable housing should result in increasing overall demand for Formaldehyde, Pentaerythritol, Hexamine and Phenolic resins.

Ÿ The Medium-density Fibreboard (MDF) industry, a big consumer of Formaldehyde, is growing, thus augmenting demand for Formaldehyde in the Indian market.

Solar power segment

Industry structure and development

The Company's Solar Power Division located at Village Bap in Jodhpur

District in the state of Rajasthan is engaged in the generation of power

from solar energy using Photo Voltaic (PV) technology. The project was set

up under the Renewable Energy Certicate (REC) scheme.

Opportunities

Ÿ With the Government's ambitious targets for renewable energy generation, about 230 acres of unused land owned by the Company near an operational solar energy generation plant is a valuable asset.

Threats

Ÿ Lack of enforcement of the Renewable Purchase Obligation scheme.

Ÿ Downward revision of prices of Renewable Energy Certicates will lower revenues.

product purity. The Company is one of the only Indian manufacturers

operating on this technology. The Pentaerythritol and Hexamine

manufacturing technologies have been developed in-house by the

Company and has been rened over the years to compete globally on cost

and quality.

The Company's state-of-the-art resin production plant has a

collaborative agreement with Hexion Inc. - the global leader in thermoset

resins, and ASK Chemicals – a global player in foundry solutions and

resins. These collaborations enable the Company to add specialized,

high-value products to its manufacturing portfolio.

Opportunities

Ÿ Being a high volume product and high cost of transportation, the

Company is currently only able to service Formaldehyde consumers

in the West (from the Ankleshwar plant) and East (from the Vizag

plant) of India. The Company proposes to add a new plant in Andhra

Pradesh. With large new manufacturing capacities for wood products

(big consumers of Formaldehyde) scheduled to be operational in the

South, the Company would be poised well to cater to this increase in

demand.

Ÿ Phenolic resins are used in a wide variety of applications, such as

foundries, refractories, abrasives, adhesives, grinding tools,

composites and more. There is great potential for developing high

value resins through continuous research.

Ÿ Technology infusion to increase production and reduce costs.

Threats

Ÿ Inordinate uctuations in Methanol and Phenol prices could affect

margins, and possibly increase inventory carrying risk.

Ÿ Cheaper imports of Pentaerythritol or Hexamine could reduce margins.


Solar Panels, Jodhpur

Performance

The operations of the Solar Power Division remained stable through the

year. Choice of technology for the project resulted in the Division to be

amongst projects with the highest performance ratio in the country.

Revenue accrual, however, was lower than the previous year on account of

reduction in the price of RECs, subsequent suspension of trading in RECs,

as well as higher depreciation costs.

Outlook

Ÿ The Division expects stable operations to continue.

Ÿ With resumption of trading in RECs, revenue accrual expected to improve.

Ÿ Expectation that the government will improve enforcement of the Renewable Purchase Obligation leading to better REC sales.

Quality Accreditation and OHSAS

During the year, both manufacturing units of the Company at Ankleshwar

and Vishakhapatnam renewed the ISO 9001 certication for quality

management systems, the ISO 14001 certication for environment

management systems and practices, and OHSAS 18001 certication for

organizational health and safety systems.

Safety and Environment

The Company maintained its safety record and it remained an accident

free year at all units.

Proactive practices in managing and protecting the environment ensured

control on wastage and recycling resources.

Risks and Concerns

Currently, the Company perceives the following main business risks:

Ÿ Cheap imports and dumping by other countries threaten to adversely impact domestic prices leading to lower margins.

Ÿ Extreme volatility in prices of raw materials and other inputs could lead to uctuating margins, and possibly have a overall negative impact on protability as a result of higher inventory carrying risk.

Ÿ Government's weak enforcement of the Renewable Purchase

Obligation and the uncertainty on the future of the Renewable Energy

Certicate (REC) mechanism.

Internal Control Systems and Adequacy

An adequate system of internal control is in place. The assets, buildings,

plant and machinery, vehicles and stocks of the Company are insured,

including for loss of prots.

The key elements of the control system are:

Ÿ Clear and well dened organisation structure and limits of nancial authority.

Ÿ Corporate policies for nancial reporting, accounting, information security, investment appraisal and corporate governance.

Ÿ Annual budgets and business plan, identifying key risks and opportunities.

Ÿ Internal audit for reviewing all aspects of laid down systems and procedures as well as risks and control.

Ÿ Risk Management Committee that monitors and reviews all risk and control issues.

Human Resource and Industrial Relations

The Company has consistently laid focus on people development and the

role played by its human resources in inculcating organisational

excellence in fast changing business environment. The company adopts

good HR practices to impart fairness and transparency in all its

operations. Each employee is guided by a detailed Code of Conduct that

helps the organisation to achieve its goals in an ethical manner. KCI

regularly conducts training programmes for different levels of employees

to ensure mapping of job requirement and skills base.

The industrial relations climate of the Company continues to remain

harmonious and cordial with focus on improving productivity, quality and

safety.

The number of persons permanently employed by the Company during the

year was approximately 310.

Statement in this 'Management Discussion and Analysis' describing the Company's objectives, projections, estimates, expectations or predictions may be 'forward looking statements' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company's operations include global and Indian demand supply conditions, nished goods prices, feed stock availability and prices, cyclical demand and pricing in the Company's principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations.

CAUTIONARY STATEMENT



NEWFRONTIERS

RENEWABLE ENERGYThe Company's initiative in the standalone renewable energy generation began in the year 2012. With a current generation capacity of 5.0 MW, the grid-interactive solar photovoltaic technology based power plant of the Company at Phalodi in Jodhpur district in the state of Rajasthan continued to operate with one of the highest performance ratios in the country. The plant is equipped with dual axis tracking system in 2.5 MW capacity, which ensures capture of maximum solar radiation by orienting the modules to face the sun at all times.

The renewable energy sector, however, continues to face policy implementation and procedural difculties. The Renewable Purchase Obligation Scheme is weakly implemented which has compelled the Company to make a provision of unsold Renewable Energy Certicates (RECs) in its books. Last year, the Government also reduced the prices of

RECs without commensurate adjustment in the number of RECs held. This is being collectively contested by the renewable energy industry through the concerned trade bodies, the Green Energy Association and the Indian Wind Power Association, and trading of RECs remained suspended. Although trading has resumed this year, further growth in the sector will depend on government policy and judicious regulation.

TEXTILESWith the objective of diversifying its product mix and reaching out to new geographies, the Company has set up an integrated denim manufacturing unit in Ethiopia, Africa through a subsidiary company Kanoria Africa Textiles plc (KAT) incorporated in Ethiopia. The composite plant starting with spinning and ending with processing and nal production of fabric was inaugurated by the Honourable Prime Minister of the Federal Democratic Republic of Ethiopia in the year 2015.

The project is equipped with comprehensive waste management systems and non-polluting electric boilers, making it a zero efuent facility, and one of the rst Green Denim plants in the world.

Setting up the Greeneld project was a challenging exercise as it was both a new geography and a new industry. The venture continues to be under pressure despite improved production and quality.

Operations of KAT during the year were stable with respect to production. There was considerable improvement in quality and packaging which are now commensurate with industry standards. The Company expects to operate at full installed capacity by the end of this year. The Company also continued to add new customers from the USA, Germany and Italy. In addition KAT is in advance discussion with many other major garment manufacturers.


Solar Panels, Jodhpur

Fabric manufacturing at Kanoria Africa Textiles plc, Ethiopia Jodhpur



There were cases of civic and political unrest in Ethiopia during 2017-18. KAT, however, was able to insulate itself through demonstration of its commitment and sensitivity to the community. The proactive social responsibility of the Company continued to pay dividend.

Ethiopia has the potential to be a major garmenting exporter as a result of government initiatives. The demand for denim fabrics, as well as margins on these fabrics, is expected to increase once these fabrics are converted to garments within Ethiopia. The country enjoys the provisions of African Growth & Opportunity Act (AGOA) wherein it has duty free access to both US as well as European markets. Towards leveraging this opportunity, KAT is getting into integrated manufacturing by adding garmenting ina small way.

AUTOMOTIVE & INDUSTRIAL ELECTRONICSAPAG Holding (operating under the brand APAGCoSyst Electronic Control Systems), a subsidiary of Kanoria Chemicals & Industries Ltd. is engaged in the business of automotive and industrial electronics. APAGCoSyst designs, develops and manufactures concept lighting and electronic control units (ECUs) for the automotive and other quality-conscious industries. End customers include automotive majors such as Volkswagen, Audi, Bentley, Bugatti, Lamborghini, BMW, Mini, Rolls-Royce, Jaguar, Land Rover, Renault, Alfa Romeo, and Jeep.

The Company continued to enjoy returns following the post-takeover growth structuring and investment with strong protable growthin 2017-18.

In response to customer interest, APAG has begun the second phase of construction for its primary production plant in the Czech Republic. The addition is expected to be commissioned in November 2018 and represents space required to satisfy already contracted business. Automotive customers demand global production and production redundancy. To tap this opportunity, APAG will commission its second production facility in Windsor, Canada, across the river from Detroit, USA in October 2018. Sales forecasts for this plant expect a two to three year period to achieve critical scale.

The Company is maintaining its strategy for a focus on concept lighting products in Europe and has enhanced the R&D group for concept lighting located in Nürnberg, Germany in the heart of the German automotive cluster with optical and mechanical expertise. For the ECU business and to help sales for the Canadian location, APAG has also launched a small R&D team in Windsor working with the legacy team in Switzerland. This team is already working on its rst development project awarded by the North American division of an existing customer in Europe.

This year is a big step for APAGCoSyst with a dual geography market strategy. Sales efforts for Canada, aimed at existing European customers with North American operations, have been well received. Even prior to the launch of the production facility, the company has been awarded two projects. Also, the European business plan continues to look strong for coming years.

New SMT Line


VALUE

Revenue from Operations

4000

5000

6000

7000

8000

9000

10000

`m

illio

n

5,414 5,309

5,979

7,337

8,448

2013-14 2014-15 2015-16* 2016-17* 2017-18*

0

200

400

600

800

1000

-200

-400 2013-14 2014-15 2015-16* 2016-17* 2017-18*

837

530469

524

800

337

123

(72)(237)

116

Operating and Net Prot

`m

illio

n

Operating Prot Net Prot



Earning per Share

7.71

2.82

(1.65) (3.38)

2013-14 2014-15 2015-16* 2016-17* 2017-18*

`

-2

0

2

4

6

10

-4

8

3.22

Gross Block

5,336 5,4095,839

8,519

9,641

2013-14 2014-15 2015-16* 2016-17* 2017-18*

4000

5000

6000

7000

8000

9000

11000

`m

illio

n

3000

10000



Equity Shareholders Fund

4000

4500

5000

5500

`m

illio

n

4,959 4,936

6,029

5,8015,879

2013-14 2014-15 2015-16* 2016-17* 2017-18*

6000

6500

Book Value per Share

100

110

130

113.50 112.98

137.98

132.77 134.55

2013-14 2014-15 2015-16* 2016-17* 2017-18*

140

150

120

90

80

Figures pertain to consolidated nancials

* Figures for these years are as per new accounting standards (Ind AS) and Schedule III of Companies Act, 2013. Hence these numbers are not comparable with previous years.

`



DIRECTOR’SREPORTTO THE SHARE HOLDERS

YYour Directors have pleasure in presenting the Fifty Eighth Annual Report, along with the Audited Accounts of the Company for the nancial year ended 31st

March 2018.

Detailed information on the performance of your Company appears in the Annual Report. A discussion on the operations of the Company is given in the sections

titled 'Year in Review' and 'New Frontiers'. Some of the statutory disclosures, however, appear in this Report. The Report, read along with the other sections, would

provide a comprehensive overview of the Company's performance and plans.

FINANCIAL RESULTS

The nancial performance of the Company for the year ended 31st March 2018 is summarised below:

OVERVIEW

During the year under review, the performance of the Company remained under pressure. The Chemicals business suffered from uctuating commodity prices,

particularly in inputs required for the products of the Company. Due to efcient functioning of both of its plants in Ankleshwar, Gujarat and Vizag, Andhra Pradesh,

the Company has withstood the pressures in the market. The future, however, is looking much brighter.

The technological upgradation in the Formaldehyde plant at Ankleshwar was completed during this year. The Company is now looking to add a third location for a

new plant in Andhra Pradesh.

In the solar power segment, generation continues to be good.

A brief description of the operations of the subsidiaries of the Company appears later in this report.

SCHEME OF AMALGAMATION

The Board of Directors, in its Meeting held on 18th May 2018, has approved a Scheme of Amalgamation for the amalgamation of the Company's wholly owned

subsidiary, Pipri Limited with the Company with effect from 1st April 2018, subject to necessary statutory and regulatory approvals, including sanction of the

Hon'ble National Company Law Tribunal. The amalgamation will enable pooling and more effective utilisation of the combined resources thereby beneting the

Company, its shareholders and all concerned.

Par�culars 2017-2018 2016-2017

Total Income 3,701.22 3,500.41

Profit before Deprecia�on, Finance Cost, Tax and Excep�onal items 364.87 512.15

Deprecia�on and Amor�sa�on expenses 211.88 204.32

Finance Costs 70.58 32.67

Excep�onal items - 184.17

Profit before Tax 82.41 90.99

Less: Tax expenses 26.41 (96.21)

Profit for the year 56.00 187.20

Other Comprehensive income for the year, net of tax (23.84) 1.49

Total Comprehensive income for the year 32.16 188.69

(Rs. in million)





MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments have occurred after the close of the nancial year 2017-18 till the date of this Report, which affect the nancial position of

the Company.

DIVIDEND

The Board of Directors recommends, for consideration of the shareholders at the Annual General Meeting, a Dividend @ 30% (Rs. 1.50 per share) on Equity

Shares of Rs. 5/- each for the nancial year ended 31st March 2018.

CREDIT RATINGS

CARE Ratings Limited (CARE) has reafrmed CARE A+ (Single A Plus) rating for the long-term bank facilities of the Company.

CARE has also reafrmed CARE A1+ (A One Plus) ratings for the short-term bank facilities and Commercial Paper.

CONSOLIDATED FINANCIAL STATEMENT

As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) and provisions of the Companies Act, 2013, the

audited Consolidated Financial Statement for the year ended 31st March 2018 has been annexed with the Annual Report.

DEPOSITS

During the year under review, the Company has not accepted any deposits from the public and that as at the end of the year there were no outstanding deposits

under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal nancial controls with respect to nancial statements. The policies and procedures adopted by the Company ensure

prevention and detection of frauds and errors, accuracy and completeness of the records and timely preparation of reliable nancial statements. No reportable

material weakness in the design or operation was observed during the year.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year, on the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at its meeting held on 14th November 2017, has

re-appointed Shri R. V. Kanoria (DIN: 00003792) as the Managing Director of the Company for further period of three years with effect from 10th January 2018,

subject to the approval of the shareholders of the Company.

On the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at its meeting held on 18th May 2018, has appointed Shri

Sidharth Kumar Birla (DIN: 00004213) as an Additional Director of the Company in the category of Independent Director, not liable to retire by rotation, for a period

of 5 consecutive years with effect from 18th May, 2018, subject to the approval of the shareholders.

Shri Sidharth Kumar Birla has given his consent to act as Director and declared that he is eligible for appointment as a Director and meets the criteria of

independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 (“Act”) and the Listing Regulations.

In the opinion of the Board, Shri Sidharth Kumar Birla fullls the conditions for appointment as Independent Directors as specied in the Act and the Listing

Regulations and is also independent of the Management.

As per Section 161 of the Companies Act, 2013, Shri Sidharth Kumar Birla as an Additional Director holds ofce up to the date of the 58th Annual General Meeting.

The necessary resolution for his appointment as an Independent Director of the Company, not liable to retire by rotation, for a period of 5 consecutive years with

effect from 18th May 2018, is being placed at the 58th Annual General Meeting for the approval of the shareholders. The Board of Directors recommends

appointment of Shri Sidharth Kumar Birla as a Director in the interest of the Company.

Shri S. V. Kanoria (DIN: 02097441) retires by rotation at the ensuing AGM, under the applicable provisions of the Act, and being eligible, offers himself for

appointment as a Director of the Company.

None of the Directors of the Company is disqualied for being appointed as a Director, as specied in Section 164(2) of the Act.

Additional information, pursuant to the Listing Regulations, in respect of Directors seeking appointment/re-appointment is given in the AGM Notice

of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration from all the Independent Directors of the Company, conrming that they meet the criteria of independence, as prescribed

under the Companies Act, 2013 and the Listing Regulations.

PERFORMANCE EVALUATION

The Company has framed the criteria for performance evaluation of Independent Directors, the Board, the Board Committees and other individual Directors.

Criteria for performance evaluation of the Chairman & Managing Director, Executive Director and Non-Independent Director have also been framed.

The criteria for performance evaluation of Directors among others includes factors such as preparation, participation, engagement, personality and conduct,

value addition, strategic planning and vision, team spirit and consensus building, leadership quality, understanding and focus on key business issues,

independent thinking and judgment, quality of analysis, experience and business wisdom, management qualities, awareness, motivation, integrity, ethics and

receptivity. The criteria for evaluating the Board's functioning/effectiveness inter alia includes its structure, strategic review, business performance review,

internal controls, process and procedures.

On the basis of the criteria framed, a process was followed by the Board for evaluating the performance of individual Directors, its own performance and its

Committees. The Nomination and Remuneration Committee also evaluated the performance of every individual Director. The Independent Directors in their

separate Meeting also carried out the performance evaluation of the Chairman & Managing Director, Executive Director and other non-independent Director as

well as the Board of the Company. The Directors expressed overall satisfaction on the performance and functioning of the Board, its Committees and the Directors.

FAMILIARISATION PROGRAMMES

The details of programmes to familiarise the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in

which the Company operates, business model/procedures/processes of the Company, etc. through various programmes are put on the website of the Company

and can be accessed at the link: http://www.kanoriachem.com/images/FamPro.pdf.

NUMBER OF MEETINGS OF BOARD OF DIRECTORS

During the Financial Year 2017-18, the Company held four Meetings of the Board of Directors. The details of the Meetings and attendance of each of the Directors

thereat are provided in the Report on Corporate Governance forming part of the Annual Report. The maximum gap between any two consecutive Board Meetings

did not exceed 120 days.

AUDIT COMMITTEE

The Audit Committee of the Company comprises of Shri Amitav Kothari, Shri H. K. Khaitan and Prof. S. L. Rao, Independent Directors, and Shri R. V. Kanoria,

Chairman & Managing Director of the Company. Shri Amitav Kothari is the Chairman of the Committee. The terms of reference of the Committee have been

provided in the Corporate Governance Report.

STAKEHOLDERS' RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee of the Company comprises of Shri H. K. Khaitan and Shri Amitav Kothari, Independent Directors and Shri S. V. Kanoria,

Wholetime Director of the Company. Shri H. K. Khaitan is the Chairman of the Committee. The terms of reference of the Committee have been provided in the

Corporate Governance Report.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee of the Company comprises of Prof. S. L. Rao, Shri H. K. Khaitan, Shri Ravinder Nath and Shri G. Parthasarathy,

Independent Directors, and Shri R. V. Kanoria, Chairman & Managing Director of the Company. Prof. S. L. Rao is the Chairman of the Committee. The terms of

reference of the Committee have been provided in the Corporate Governance Report.

The Board of Directors of the Company, based on the recommendation of the Nomination and Remuneration Committee, has formulated the Nomination and

Remuneration Policy, which contains the matters with regard to criteria for appointment of Directors and determining Directors' independence and policy on

remuneration for Directors, Senior Managerial Personnel and other employees, and the same may be accessed at the Company's website at the link:

http://www.kanoriachem.com/images/NomRemPol.pdf.





CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Corporate Social Responsibility Committee of the Company comprises of Smt. Madhuvanti Kanoria, a Director, Shri R. V. Kanoria, Managing Director and Shri

H. K. Khaitan, an Independent Director. Smt. Madhuvanti Kanoria is the Chairperson of the Committee. The terms of reference of the Committee have been

provided in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company acts as a good Corporate Citizen and as its philosophy always strive to conduct its business in inclusive, sustainable, socially responsible, ethical

manner and to continuously work towards improving quality of life of the communities. The Company has in place a Corporate Social Responsibility Policy (CSR

Policy) indicating the activities to be undertaken by the Company. The Corporate Social Responsibility Policy of the Company enables it to continue to make

responsible contribution towards welfare of the society.

Initially, the Company's focus will be on the following areas:

Ÿ Promoting education, including special education and employment enhancing vocational skills especially among children, women, elderly and the differently

abled and livelihood enhancement projects.

Ÿ Empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior

citizens.

Ÿ Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation.

The Company may also undertake other need based initiatives in compliance with Schedule VII to the Companies Act, 2013.

The CSR Policy may be accessed on the Company's website at the link: http://www.kanoriachem.com/images/CSRPol.pdf.

During the year, the Company has spent Rs. 1.80 million on the CSR activities.

The Annual Report on the CSR activities, pursuant to Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is provided as Annexure to this

Report.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis is a part of the Annual Report.

SUBSIDIARIES

APAG Holding AG, Switzerland (“APAG”) and Pipri Limited are the wholly owned subsidiaries of the Company. Kanoria Africa Textiles Plc, Ethiopia is a subsidiary of

the Company. During the year, APAG incorporated a new wholly owned subsidiary in Canada by the name of APAG Elektronik Corp., to set up a manufacturing plant

to cater to the North American market. Further, APAG Elektronik S. De R.L. De C.V. and APAG Services S. De R.L. De C.V., the wholly owned subsidiaries of APAG, in

Mexico which were not in operation were liquidated. APAG now has APAG Elektronik AG, APAG Elektronik s.r.o, CoSyst Control Systems GmbH, APAG Elektronik LLC

and APAG Elektronik Corp. as its wholly owned subsidiaries.

The performance of the Automobile Electronics business in Europe, carried out by APAG Group has been exceedingly good during the year and strategic initiatives

have proved to be rewarding. In a span of ve years, the turnover of this business has increased by over 250%. The bottom line is also showing commensurate

growth.

The Denim plant of Kanoria Africa Textiles Plc. in Ethiopia is now showing signs of turning the corner. The most difcult issues of labour turnover and consistent

quality have been largely overcome. In order to align the product mix to current market requirements, fresh investments are being made for adding a ring spinning

section. Further, the company is also getting into integrated manufacturing by adding garmenting in a small way. The loss during the year is much lower than the

previous years and further improvement in performance is expected in the coming years.

A report on the performance and nancial position of the subsidiaries of the Company, as per the Companies Act, 2013, is provided in the Annual Report and

hence, the same is not repeated here for the sake of brevity.

The Policy for determining Material Subsidiaries as approved by the Board may be accessed on the Company's website at the link:

http://www.kanoriachem.com/images/MatSub.pdf.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES

PROVIDED

Details of loans given, investments made, guarantees given and securities provided as covered under the provisions of Section 186 of the Companies Act, 2013

are given in the Note No. 36 of the Standalone Financial Statements.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the nancial year with related parties were in the ordinary course of business and on

arm's length basis. None of the transactions with any of the related parties were in conict with the Company's interest. The Company had not entered into any

transaction with related parties during the year which could be considered material, in terms of materiality threshold for the related party transactions.

The Policy on Related Party Transactions as approved by the Board may be accessed on the Company's website at the l ink:

http://www.kanoriachem.com/images/RelPar.pdf.

VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and has put in place a mechanism of reporting illegal or unethical behaviour. In compliance

with the provisions of Section 177(9) of the Companies Act, 2013 and the Listing Regulations, 2015, the Company has in place a Whistle Blower Policy for its

Directors and Employees to report concerns about unethical behaviour, actual or suspected fraud or violation of applicable laws and regulations and the

Company's Codes of Conduct. The concerns may be reported to the Audit Committee through the Nodal Ofcer and, in exceptional cases, may also be reported to

the Chairman of the Audit Committee. The condentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice.

During the year under review, no employee was denied access to the Audit Committee.

The Whistle Blower Policy may be accessed on the Company's website at the link: http://www.kanoriachem.com/images/WhiBlo.pdf.

CORPORATE GOVERNANCE

The Company adheres to good governance practices. Corporate Governance at KCI extends to all stakeholders and is embodied in every business decision. The

Company places prime importance on reliable nancial information, integrity, transparency, empowerment and compliance with the law in letter and spirit. While

Management Discussion and Analysis Report that is an annexure to the Directors' Report, appears in the Section titled Year in Review in the Annual Report, the

Corporate Governance Report and the Certicate from the Auditors of the Company conrming compliance of the conditions of Corporate Governance are annexed

hereto and form a part of the Directors' Report.

There is a conscious effort to ensure that the values enshrined in the Codes of Conduct for the Directors and Senior Management Personnel and the Employees

respectively, are followed in true spirit across all levels of the Company.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return of the Company as on the nancial year ended 31st March 2018 is given in Form no. MGT- 9 as an Annexure to this Report.

AUDITORS AND AUDITORS' REPORT

As per the provisions of Section 139 of the Companies Act, 2013, M/s. Jitendra K Agarwal & Associates, Chartered Accountants (Firm Registration No. 318086E)

were appointed, at the 57th Annual General Meeting of the Company held on 4th September, 2017, as the Statutory Auditors of the Company for a term of 5 years

commencing from the conclusion of the 57th AGM till the conclusion of the 62nd AGM.

The Auditors' Report for the nancial year ended 31st March, 2018 does not contain any qualication, reservation or adverse remark.

FRAUD REPORTING

During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Companies Act, 2013, therefore no detail is required to be

disclosed under Section 134 (3) (ca) of the Act.



COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013, the Board has, on the recommendation of the Audit Committee, approved the appointment of M/s N. D. Birla

& Co., Cost Accountants (Firm Registration No. 000028), Ahmedabad, as the Cost Auditors for conducting the audit of the cost records of the Company for the

nancial year ending on 31st March 2019, at a remuneration of Rs. 1,45,000/- (Rupees One Lakh Forty Five Thousand only) plus applicable taxes and

reimbursement of travelling and other incidental expenses to be incurred in the course of cost audit.

SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had

appointed M/s Vinod Kothari & Co., Practising Company Secretaries (UIN: P1996WB042300), to conduct Secretarial Audit of the Company for the nancial year

2017-18. The Secretarial Audit Report for the nancial year 2017-18 is provided as an Annexure to this Report. The Report does not contain any qualication,

reservation or adverse remark.

RISK MANAGEMENT

The Company's management systems, organizational structures, processes, codes of conduct together form the basis of risk management system that governs

and manages associated risks. The Risk Management Committee of the Company assesses the signicant risks that might impact the achievement of the

Company's objectives and develops risk management strategies to mitigate/minimise identied risks and designs appropriate risk management procedures. The

Board does not foresee any risk which may threaten the existence of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

EARNINGS/OUTGO

As required under Section 134 of the Companies Act, 2013 and the rules framed thereunder, the statement containing necessary information in respect of

conservation of energy, technology absorption, foreign exchange earnings and outgo is provided in the Annexure to this Report.

EMPLOYEES INFORMATION AND RELATED DISCLOSURES

As required under Section 197(12) of the Companies Act, 2013 read with the Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014, disclosures of remuneration and other details/particulars of the Directors and employees of the Company are provided in the

Annexure to this Report.

SAFETY AND ENVIRONMENT

The Company is committed to sustainable development and a safe workplace. Its approach to environment management is guided by the principle of provision of

safe working environment through continuous up-gradation of technologies, prevention of pollution and conservation of resources and recycling waste.

As a result of its sustained compliance to Health, Safety, Environment and Quality standards, the Company's Alco Chemical Divisions at Ankleshwar and

Vishakhapatnam are ISO 9001, 14001 and OHSAS 18001 certied.

The Company has a documented Health & Safety Policy that is displayed and communicated to all employees at plant locations. With the view to achieve a 'Zero

Accidents' status, the Company has developed health and safety procedures as well as safety targets and objectives.

The Company also lays thrust on renewable energy sources and solar energy.

HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS

The Company's human resource development is founded on a strong set of values. The policies seek to instil spirit of trust, transparency and dignity among all

employees. The Company continues to provide ongoing training to its employees at different levels.

Industrial relations with the employees and workers across all locations of the Company continued to be cordial during the year.



DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in

terms of Section 134(5) of the Companies Act, 2013:

a) that in the preparation of the annual nancial statements for the year ended 31st March, 2018, the applicable accounting standards have been followed

along with proper explanation relating to material departures, if any;

b) that such accounting policies have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent

so as to give a true and fair view of the state of affairs of the company as at 31st March 2018 and of the prot of the Company for the year ended on that date;

c) that proper and sufcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,

2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities:

d) that the annual nancial statements have been prepared on a going concern basis;

e) that proper internal nancial controls to be followed by the Company have been laid down and that the nancial controls are adequate and are operating

effectively; and

f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating

effectively.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,

PROHIBITION AND REDRESSAL) ACT, 2013

During the year under review, no case was led pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS /

TRIBUNALS

During the year under review, no signicant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and

Company's operations in future.

ACKNOWLEDGEMENTS

Your Directors acknowledge with gratitude the commitment and dedication of the employees for their untiring personal efforts as well as their collective

contributions at all levels that have led to the growth and success of the Company. The Directors would like to thank other stakeholders including lenders and

business associates who have continued to provide support and encouragement.

For and on behalf of the Board,

Registered Office

'Park Plaza'

71, Park Street R . V. Kanoria

Kolkata 700 016 Chairman & Managing Director

Date: 18th May 2018 DIN:00003792



[Pursuant to clause (o) of sub-section (3) of Section 134 of the Companies Act, 2013 and Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014]

Annexure To The Directors' ReportANNUAL REPORT ON CSR ACTIVITIES

1. A brief outline of the Company's CSR Policy, including overview of projects or programmes proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.

Please refer to the Sec�on on Corporate Social Responsibility in the Board's Report.

2. The Composi�on of the CSR Commi�ee. Please refer to the Corporate Governance Report for the composi�on of the Corporate Social Responsibility Commi�ee.

3. Average net profit of the Company for last three financial years Rs. 89.82 million

4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above)

Rs. 1.80 million.

5. Details of CSR spent during the financial year.

(a) Total amount to be spent for the financial year; Rs. 1.80 million.

(b) Amount unspent, if any; NIL.

(c) Manner in which the amount spent during the financial year Details are given below.

1 2 3 4 5 6 7 8

Sl. No CSR project or ac�vity iden�fied

Sector in which the Project is covered

Projects or programs(1) Local area or other(2) Specify the State and District where projects or programs were undertaken

Amount outlay (budget) project or program wise

Amount spent on the project or programsSub-heads:(1) Direct expenditure on projects or programs.(2) Overheads

Cumula�ve expenditure upto the repor�ng period

Amount spent: Direct or through implemen�ng agency

1) Skill Development of Youth in Rural/Tribal area

Promo�on of Educa�on

1) Local Area2) Jhagadia, Dist:

Bharuch, Gujarat

Rs.0.20 Million Direct ExpenditureRs.0.20 million

Rs.0.20 Million Through implemen�ng agencySewa Rural, Jhagadia

2) Skill Development for Female Students in Rural/Tribal area

Empowering Women through employment enhancing Skill Training

1) Local Area2) Kakadkui, Dist:

Bharuch, Gujarat

Rs.0.07 Million Direct ExpenditureRs.0.07 Million

Rs.0.07 Million Through implemen�ng agency Madhav Vidyapeeth, Kakadkui

3) Rural Medical Camp Contribu�on

Preven�ve Health Care inTribal/Rural Area

1) Local Area2) Kakadkui, Dist:

Bharuch, Gujarat


Rs.0.10 Million Through implemen�ng agencies -Ankleshwar Industries Associa�on, Jayaben Modi Hospital, Lions Club of Ankleshwar

4) Empowering Youth through Skill Development and Employment


1) Local Area2) Vataria, Sengpur,

Motali, Sarangpur, Dist: Bharuch Gujarat

Rs. 1.02 Million Direct ExpenditureRs.1.02 Million

Rs.1.02Million

Through implemen�ng agency -Bunyaad Founda�on, Delhi



1 2 3 4 5 6 7 8

Sl. No CSR project or ac�vity iden�fied

Sector in which the Project is covered

Projects or programs(1) Local area or other(2) Specify the State and District where projects or programs were undertaken

Amount outlay (budget) project or program wise

Amount spent on the project or programsSub-heads:(1) Direct expenditure on projects or programs.(2) Overheads

Cumula�ve expenditure upto the repor�ng period

Amount spent: Direct or through implemen�ng agency

5) Providing Quality Educa�on in Rural School


1) Local Area, Visakhapatnam2) Parvada Mandal, Visakhapatnam, Andhra Pradesh


Rs.0.41 Million Through implemen�ng agencyM V Founda�on, Secundrabad

Grand Total Rs. 1.80 Million Rs. 1.80 Million Rs. 1.80 Million

6) Details of implemen�ng agencies CSR projects are undertaken through NGOs/Associa�ons such as 1. Sewa Rural, Jhagadia, 2. Bunyaad Founda�on, Delhi, 3. Madhav Vidyapeeth 4. Ankleshwar Industries Associa�on in associa�on with other NGOs such as Lions Club of Ankleshwar, Jayaben Modi Hospital Ankleshwar, and 5. M. V. Founda�on, Secundrabad.

7) In case the Company has failed to spend the 2% of the average net profit of the last three years or any part thereof, the Company shall provide reasons for not spending the amount in the Board Report.

NA

8) Responsibility Statement of the CSR Commi�ee that the implementa�on and monitoring of Corporate Social Responsibility Policy is in compliance with CSR objec�ves and Policy of the Company.

The CSR Commi�ee confirms that the implementa�on and monitoring of Corporate Social Responsibility Policy, is in compliance with CSR objec�ves and Policy of the Company.

Registered Office 'Park Plaza' 71, Park Street Kolkata 700 016

thDate: 18 May 2018

Madhuvanti KanoriaChairperson, CSR Committee

DIN:00142146

R. V. KanoriaChairman & Managing Director

DIN:00003792



Annexure To The Directors' ReportForm No. MGT-9 | EXTRACT OF ANNUAL RETURN

As on the financial year ended on 31.03.2018

[Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

(i) CIN L24110WB1960PLC024910

(ii) Registra�on Date 17.12.1960

(iii) Name of the Company KANORIA CHEMICALS AND INDUSTRIES LIMITED

(iv) Category / Sub-Category of the Company PUBLIC LIMITED COMPANY/LIMITED BY SHARES

(v) Address of the Registered office and contact details “PARK PLAZA”, SOUTH BLOCK ,7TH FLOOR71, PARK STREET, KOLKATA -700016 PHONE : (033) 4031 3200

(vi) Whether listed company (Yes / No) YES

(vii) Name, Address and Contact details of Registrar and Transfer Agent, if any

C B MANAGEMENT SERVICES PVT LTDP-22, BONDEL ROAD, KOLKATA - 700019 PHONE : (033) 40116700 / 2280 6692, FAX : (033) 40116739

I. REGISTRATION AND OTHER DETAILS

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10% or more of the total turnover of the company are stated below:-

Sl. No. Name and Descrip�on of main products/Services NIC Code of the Product/Service % to total turnover of the Company

1 Formaldehyde 37% 20119 44.36

2 Pentaerithritol 20119 27.80

3 Hexamine 20119 16.16

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIESSl. No. Name and Address of the Company CIN/GLN Holding /

Subsidiary / Associate

% of shares held Applicable Sec�on

1 Vardhan Limited thKCI Plaza,7 Floor

23C Ashutosh Chowdhury Avenue Kolkata- 700 019

U14293WB1947PLC015833 Holding 59.94% 2(46)

2 Pipri LimitedPark Plaza, South Block71 Park StreetKolkata-700 016

U67120WB1977PLC031082 Subsidiary 100% 2(87)

3 APAG Holding AGZentrum Staldenbach 138808 Pfäffikon Switzerland

Foreign Subsidiary

100% 2(87)

4 APAG Elektronik AGRingstrasse 148600 DübendorfSwitzerland

Wholly owned subsidiary of APAG Holding AG

- 2(87)

5 APAG Elektronik s.r.o.U Panasonic 396530 06 Pardubice Czech Republic


- 2(87)



Sl. No. Name and Address of the Company CIN/GLN Holding / Subsidiary / Associate

% of shares held Applicable Sec�on

6 CoSyst Control Systems GmbHMar�n-Albert, Str. 1, 90491 Nürnberg, Germany


- 2(87)

7 APAG Elektronik LLC2675 Bellingham Dr., Troy, MI 48083, United States


- 2(87)

8 APAG Elektronik Corp.100 Ouelle�e Avenue, 1300Windsor, Ontario, Canada N9A 6T3.


- 2(87)

9 Kanoria Africa Tex�les PLCKirkos Sub City, Woreda 09, House No. 687, Amanelwa Building, Room No. 403,Wello Sefer, Addis Ababa, Ethiopia

Foreign Subsidiary

78.68% 2(87)

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) (i) Category-wise Share Holding

Category of Shareholders No. of Shares held at the beginning of the year(As on 01.04.2017)

No. of Shares held at the end of the year(As on 31.03.2018)

% Change during

theyearDemat Physical Total % of Total

SharesDemat Physical Total % of Total

Shares

A. PROMOTERS

(1) INDIAN

(a) Individual / HUF 1,585,386 0 1,585,386 3.63 1,528,386 0 1,528,386 3.50 (0.13)

(b) Central Govt. 0 0 0 0.00 0 0 0 0.00 0.00

(c) State Govt.(s) 0 0 0 0.00 0 0 0 0.00 0.00

(d) Bodies Corporate 30,498,899 0 30,498,899 69.80 30,555,899 0 30,555,899 69.93 0.13

(e) Banks / FI 0 0 0 0.00 0 0 0 0.00 0.00

(f) Any Other (Specify) 0 0 0 0.00 0 0 0 0.00 0.00

Sub-total (A) (1) 32,084,285 0 32,084,285 73.43 32,084,285 0 32,084,285 73.43 0.00

(2) FOREIGN

(a) NRIs – Individuals 434,739 0 434,739 0.99 434,739 0 434,739 0.99 0.00

(b) Other – Individuals 0 0 0 0.00 0 0 0 0.00 0.00

(c) Bodies Corporate 0 0 0 0.00 0 0 0 0.00 0.00

(d) Bank / FI 0 0 0 0.00 0 0 0 0.00 0.00

(e) Any Other (Specify) 0 0 0 0.00 0 0 0 0.00 0.00

Sub-total (A) (2) 434,739 0 434,739 0.99 434,739 0 434,739 0.99 0.00

Total Shareholding of Promoter (A) = (A) (1) + (A) (2)

32,519,024 0 32,519,024 74.43 32,519,024 0 32,519,024 74.43 0.00

B. PUBLIC SHAREHOLDING

(1) INSTITUTIONS

(a) Mutual Funds 2,100 28,500 30,600 0.07 2,100 27,000 29,100 0.07 0.00

(b) Banks / FI 63,149 1,125 64,274 0.15 55,230 1,125 56,355 0.13 (0.02)

(c) Central Govt. 0 0 0 0.00 0 0 0 0.00 0.00

(d) State Govt.(s) 0 0 0 0.00 0 0 0 0.00 0.00

(e) Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00

(f) Insurance Companies 2,000 0 2,000 0.00 2,000 0 2,000 0.00 0.00

(g) FIIs 0 18,300 18,300 0.04 0 18,000 18,000 0.04 0.00

(h) Foreign Venture Capital funds 0 0 0 0.00 0 0 0 0.00 0.00

(I) Any Other (Specify) 0 0 0 0.00 0 0 0 0.00 0.00

Sub-total (B) (1) 67,249 47,925 115,174 0.26 59,330 46,125 105,455 0.24 (0.02)



Category of Shareholders No. of Shares held at the beginning of the year(As on 01.04.2017)

No. of Shares held at the end of the year(As on 31.03.2018)

%Change during

theyear

Demat Physical Total % of Total Shares

Demat Physical Total % of Total Shares

(2) NON - INSTITUTIONS

(a) Bodies Corporate

(i) Indian 1,805,718 37,278 1,842,996 4.22 1,454,266 37,278 1,491,544 3.41 (0.81)

(ii) Overseas 0 0 0 0.00 0 0 0 0.00 0.00

(b) Individuals

(i) Individual shareholders holding nominal capital upto Rs. 1 lakh

7,072,304 435,528 7,507,832 17.18 7,558,760 369,383 7,928,143 18.14 0.96

(ii) Individual shareholders holding nominal share capitalin excess of Rs.1 lakh

746,039 30,000 776,039 1.78 1,046,619 30,000 1,076,619 2.47 0.69

(c) Any Other (Specify)

NRI 551,541 21,945 573,486 1.31 315,974 21,945 337,919 0.77 (0.54)

Clearing Members 56,970 0 56,970 0.13 55,438 0 55,438 0.13 0.00

Trust 169,879 0 169,879 0.39 100 0 100 0.00 (0.39)

Other Directors & Rela�ves 15,304 1 15,305 0.03 15,214 1 15,215 0.03 0.00

Investor Educa�on and Protec�on Fund

0 0 0 0.00 112,846 0 112,846 0.26 0.26

Unclaimed Suspense A/c 116,628 0 116,628 0.27 51,030 0 51,030 0.12 (0.15)

Sub-total (B) (2) 10,534,383 524,752 11,059,135 25.31 10,610,247 458,607 11,068,854 25.33 0.02

Total Public Shareholding (B) = (B) (1) + (B) (2) 10,601,632 572,677 11,174,309 25.57 10,669,577 504,732 11,174,309 25.57 0.00

C. Shares held by Custodians for GDRs & ADRs

0 0 0 0.00 0 0 0 0.00 0.00

GRAND TOTAL (A+B+C) 43,120,656 572,677 43,693,333 100.00 43,188,601 504,732 43,693,333 100.00 0.00

(ii) Shareholding of Promoters and Promoter Group

Sl. No.

Shareholder's Name Shareholding at the beginning of the year(As on 01.04.2017)

Shareholding at the end of the year(As on 31.03.2018)

% Change in shareholding

during theyearNo. of Shares % of total

shares of the Company

% of shares pledged /

encumbered to total shares

No. of Shares % of totalshares of the

Company

% of shares pledged /

encumbered to total shares

1 Vardhan Limited 26,133,872 59.81 0.00 26,190,872 59.94 0.00 0.13

2Kir�vardhan Finvest Services Ltd

1,154,907 2.64 0.00 1,154,907 2.64 0.00 0.00

3R V Investment & Dealers Ltd

3,210,120 7.35 0.00 3,210,120 7.35 0.00 0.00

4 Rajya Vardhan Kanoria 461,481 1.06 0.00 461,481 1.06 0.00 0.06

5 Saumya Vardhan Kanoria 556,440 1.27 0.00 556,440 1.27 0.00 0.00

6 Anand Vardhan Kanoria 434,739 0.99 0.00 434,739 0.99 0.00 0.00

7 Sheela Devi Kanoria 12,144 0.03 0.00 12,144 0.03 0.00 0.00

8 Madhuvan� Kanoria 498,321 1.14 0.00 498,321 1.14 0.00 0.00

9 Anjana Somany 27,000 0.06 0.00 0 0.00 0.00 (0.06)

10 Abhishek Somany 30,000 0.07 0.00 0 0.00 0.00 (0.07)

Total 32,519,024 74.43 0.00 32,519,024 74.43 0.00 0.00



(iii) Change in Promoters' Shareholding

Sl. No.

Shareholding at the beginning of the year (As on 01.04.2017)

Cumula�ve Shareholding during the year (As on 31.03.2018)

No of Shares % of total shares of the Company

No of Shares % of total shares of the Company

At the beginning of the year 32,519,024 74.43

Date wise increase / decrease in Promoters shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc)

No change during the year

At the end of the year 32,519,024 74.43 32,519,024 74.43

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs) :

Sl. No.

Name

Shareholding

Date Increase/ Decrease in

Shareholding

Reason

Cumula�ve Shareholding during the year (01.04.2017 to

31.03.2018)

No. of Shares at the

beginning (01.04.

2017)/end of the year

(31.03.2018)

% of total Shares of the

Company

No. ofShares

% of total sharesof the

Company

1 Chartered Finance & Leasing Limited

350,000350,000

0.800.80

01.04.201731.03.2018

NIL movement during the year 350,000 0.80

2 Bhilwara HoldingsLimited **

186,000

0

0.43

0.00

01.04.201721.07.201728.07.201728.07.201731.03.2018

-66,030-106,557

-13,413

TransferTransferTransfer

119,97013,413

00

0.270.030.000.00

3 Sarvesh Bubna Trust** 169,757

0

0.39

0.00

01.04.201707.04.201731.03.2018

-169,757 Transfer 00

0.000.00

4 Monet Securi�esPrivate Ltd

154,758154,758

0.350.35

01.04.201731.03.2018


5 Prabhala Srinivas 134,400134,400

0.310.31

01.04.201731.03.2018


6 Panna Kirit Mehta ** 103,596

0

0.24

0.00

01.04.201721.04.201731.03.2018

-103,596 Transfer 00

0.000.00

7 Seya Scaria ** 65,500

0

0.15

0.00

01.04.201705.05.201719.05.201726.05.201702.06.201709.06.201711.08.201718.08.201710.11.201717.11.201724.11.201705.01.201802.02.201809.02.201809.02.201831.03.2018

4,99110,009

2.0381,023

539-32,729-30,00054,61724,012

5,000-67,704-27,29632,715

-42,715

TransferTransferTransferTransferTransferTransferTransferTransferTransferTransferTransferTransferTransferTransfer

70,49180,50082,53883,56184,10051,37121,37175,988

100,000105,000

37,29610,00042,715

00

0.160.180.190.190.190.120.050.170.230.240.090.020.100.000.00

8 Pres�ge TradersPrivate Limited

58,000

38,000

0.13

0.09

01.04.201721.07.201704.08.201731.03.2018

-10,000-10,000

TransferTransfer

48,00038,00038,000

0.110.090.09



Sl. No.

Name

Shareholding


Shareholding

Reason


31.03.2018)


beginning (01.04.


(31.03.2018)


Company

No. ofShares


Company

9 Atam Kumar 50,42650,426

0.120.12

01.04.201731.03.2018


10 Equity Intelligence India Private Limited **

50,000

0

0.11

0.00

01.04.2017

09.06.2017

31.03.2018

-50,000 Transfer 0

0

0.00

0.00

11 Sanjeev Bubna* 0

169,757

0.00

0.39

01.04.2017

07.07.2017

31.03.2018

169,757 Transfer 169,757

169,757

0.39

0.39

12 Panna K Mehta * 0

90,000

0.00

0.21

01.04.2017

28.04.2017

29.12.2017

31.03.2018

103,596

-13,596

Transfer

Transfer

103,596

90,000

90,000

0.24

0.21

0.21

13 Sanjay Kothari 50,000

75,000

0.11

0.17

01.04.2017

09.06.2017

23.06.2017

31.03.2018

10,000

15,000

Transfer

Transfer

60,000

75,000

75,000

0.14

0.17

0.17

14 Edelweiss Custodial Services Ltd.

30,289

57,367

0.07

0.13

01.04.2017

14.04.2017

28.04.2017

07.07.2017

04.08.2017

01.09.2017

03.11.2017

05.01.2018

02.02.2018

16.02.2018

23.02.2018

02.03.2018

09.03.2018

16.03.2018

23.03.2018

31.03.2018

2,758

2,334

-21,100

8,932

2,801

5,129

14,992

27,825

1,629

-13,781

-2,552

-420

-758

-711

Transfer

Transfer

Transfer

Transfer

Transfer

Transfer

Transfer

Transfer

Transfer

Transfer

Transfer

Transfer

Transfer

Transfer

33,047

35,381

14,281

23,213

26,014

31,143

46,135

73,960

75,589

61,808

59,256

58,836

58,078

57,367

57,367

0.08

0.08

0.03

0.05

0.06

0.07

0.11

0.17

0.17

0.14

0.14

0.13

0.13

0.13

0.13

15 Saifuddin Fakhruddin Miyajiwala

25,000

50,246

0.06

0.11

01.04.2017

07.07.2017

04.08.2017

11.08.2017

18.08.2017

25.08.2017

31.03.2018

2,243

8,003

5,000

457

9,543

Transfer

Transfer

Transfer

Transfer

Transfer

27,243

35,246

40,246

40,703

50,246

50,246

0.06

0.08

0.09

0.09

0.11

0.11

16 Guruduth Cookemane Shankar

8,500

50,000

0.02

0.11

01.04.2017

08.12.2017

19.01.2018

26.01.2018

02.02.2018

09.02.2018

31.03.2018

9,500

9,000

5,000

6,000

12,000

Transfer

Transfer

Transfer

Transfer

Transfer

18,000

27,000

32,000

38,000

50,000

50,000

0.04

0.06

0.07

0.09

0.11

0.11

* Not in the list of Top 10 shareholders as on 1.4.2017. The same has been shown above since the shareholder was one of the Top 10 shareholders as on 31.3.2018.

** Ceased to be in the list of Top 10 shareholders as on 31.3.2018. The same has been shown above since the shareholder was one of the Top 10 shareholders as on 1.4.2017.



Sl. No.

Name

Shareholding


Shareholding

Reason


31.03.2018)


beginning (01.04.


(31.03.2018)


Company

No. ofShares


Company

A) DIRECTORS

1 R V Kanoria 461,481461,481

1.061.06

01.04.201731.03.2018

0 NIL movement during the year 461,481 1.06

2 Amitav Kothari 44

0.000.00

01.04.201731.03.2018 0

NIL movement during the year 4 0.00

3 H K Khaitan 100100

0.000.00

01.04.201731.03.2018 0


4 A Vellayan 15,00015,000

0.030.03

01.04.201731.03.2018 0


5 Ravinder Nath 100100

0.000.00

01.04.201731.03.2018 0


6 S L Rao 100

10

0.00

0.00

01.04.201720.10.201731.03.2018

-90 Transfer 1010

0.000.00

7 G Parthasarathy 11

0.000.00

01.04.201731.03.2018 0


8 S V Kanoria 556,440 556,440

1.271.27

01.04.201731.03.2018


9 Madhuvan� Kanoria 498,321498,321

1.141.14

01.04.201731.03.2018


B) KEY MANAGERIAL PERSONNEL (KMP)

1 N K Nolkha 1,5001,500

0.000.00

01.04.201731.03.2018 0


2 N K Sethia 00

0.000.00

01.04.201731.03.2018 0


(v) Shareholding of Directors and Key Managerial Personnel

V. INDEBTEDNESSIndebtedness of the Company including interest outstanding / accrued but not due for payment

Secured Loans excluding Deposits

Unsecured Loans Deposits TotalIndebtedness

Indebtedness at the beginning of the financial year (01.04.2017)

(i) Principal Amount 767.78 400.00 0 1,167.78

(ii) Interest due but not paid 0 0 0 0

(iii) Interest accrued but not due 1.08 0 0 1.08

Total (i + ii + iii) 768.86 400.00 0 1,168.86

Change in indebtedness during the financial year a) Addi�on (Net) b) Reduc�on (Net)

243.89 0 0 243.89

0 400.00 0 400.00

Net Change 243.89 400.00 0 (156.11)

Indebtedness at the end of the financial year (31.03.2018)

(i) Principal Amount 1,011.67 0 0 1,011.67

(ii) Interest due but not paid 0 0 0 0

(iii) Interest accrued but not due 2.79 0 0 2.79

Total (i + ii + iii) 1,014.46 0 0 1,014.46

(Rs. in million)



VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A) Remuneration to Managing Director, Whole-time Directors and/or Manager

Sl.No.

Par�culars of Remunera�on R V Kanoria S V Kanoria Total Amount

ManagingDirector

Whole�meDirector

1 Gross Salarya) Salary as per provision contained in Sec�on 17 (1) of the Income Tax Act, 1961b) Value of Perquisites u/s. 17 (2) of the Income Tax Act, 1961c) Profits in lieu of salary u/s 17(3) of the Income-tax Act, 1961

16.38 6.50 22.88

0.55 0.64 1.19

0 0 0

2 Stock Op�on 0 0 0

3 Sweat Equity 0 0 0

4 CommissionAs % of ProfitOthers, specify

0 0 0

0 0 0

5 Others, Please Specify – (Company's contribu�on to PF) 1.23 0.45 1.68

Total (A) 18.16 7.59 25.75

Ceiling as per the Act Rs. 4.65 million, being 10% of the Net Profits of theCompany as per Sec�on 198 of the Companies Act, 2013

(Rs. in million)

B) Remuneration to Other Directors

1. Independent Directors

Par�culars of Remunera�onName of Directors Total Amount

Amitav Kothari

H KKhaitan

Ravinder Nath

G Pathasarathy

S L Rao

AVellayan

Fees for a�ending Board/commi�ee mee�ngs 0.29 0.35 0.19 0.26 0.18 0.10 1.37

Commission 0 0 0 0 0 0 0

Other, Please specify 0 0 0 0 0 0 0

Total (B) (1) 0.29 0.35 0.19 0.26 0.18 0.10 1.37

2. Other Non Executive Directors

Par�culars of Remunera�on Name of Director Total Amount

Madhuvan� Kanoria

Fees for a�ending board/commi�ee mee�ng 0.21 0.21

Commission 0 0

Other, Please specify 0 0

Total (B) (2) 0.21 0.21

Total (B)=(B1)+(B2) 1.58

Total Managerial Remunera�on (A+B) 27.33

Overall Ceiling as per the Act Rs. 5.12 million, being 11% of the Net Profits as per Sec�on 198 of the Companies Act, 2013

(Rs. in million)

(Rs. in million)



C) Remuneration to Key Managerial Personnel other than MD / Manager / WTD

Sl. No. Par�culars of Remunera�on Key Managerial Personnel Total Amount

N K Nolkha N K Sethia


Company Secretary

1 Gross Salarya) Salary as per provision contained in

Sec�on 17 (1) of the Income Tax Act, 1961b) Value of Perquisites u/s. 17 (2) of the

Income Tax Act, 1961c) Profits in lieu of salary u/s 17(3) of the

Income-tax Act, 1961

5.42 2.35 7.77

0.24 0.12 0.36

0 0 0

2 Stock Op�on 0 0 0

3 Sweat Equity 0 0 0

4 CommissionAs % of ProfitOthers, specify

0 0 0

0 0 0

5 Others, Please Specify – (Company's contribu�on to PF) 0.33 0.14 0.47

Total (C) 5.99 2.61 8.60

VII. PENALTIES / PUNISHMENT / COMPOUDNING OF OFFENCES Against the Company, Directors and other Ofcers in Defaults under the Companies Act, 2013 : NONE

Registered Office'Park Plaza' 71, Park StreetKolkata-700 016

thDate: 18 May 2018


R.V. Kanoria Chairman & Managing Director

DIN:00003792

(Rs. in million)



Form No. MR-3

Annexure To The Directors' Report

To,

The Members,


“Park Plaza”, 71 Park Street,

Kolkata-700016

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Kanoria Chemicals & Industries Limited (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verication of the Company's books, papers, minute books, forms and returns led and other records maintained by the Company (as per Annexure- A1, hereinafter referred to as “Books and Papers”) and also the information provided by the Company, its ofcers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the period covered by our audit, that is to say, from April 01, 2017 to March 31, 2018 (hereinafter referred to as “Audit Period”), complied with the statutory provisions listed hereunder and also that the Company has proper board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the Books and Papers maintained by the Company for the Audit Period according to the provisions of:

1. The Companies Act, 2013 (the “Act”) and the rules made thereunder;

2. The Securities Contracts (Regulation) Act, 1956 (“SCRA”) and the rules made thereunder;

3. The Depositories Act, 1996 and the regulations and bye-laws framed thereunder;

4. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

5. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (“SEBI Act”):-

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

d. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies

Act and dealing with client;

e. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (hereinafter referred to

as “Listing Regulations, 2015”);

6. Secretarial Standards 1 and 2 as issued by the Institute of Company Secretaries of India;

We report that, having regard to the compliance system prevailing in the Company and on examination of the relevant documents and records in

pursuance thereof, on test-check basis, the Company has complied with the following laws applicable to the industry to which the Company

belongs:

a. Petroleum Act, 1934;

b. Poison Act, 1919; and

c. Indian Explosive Act, 1884

Management Responsibility:

1. Maintenance of secretarial records is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit;

2. We have followed the audit practices and the processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verication was done on test basis to ensure that correct facts are reected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion;

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2018

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule no.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]



3. We have not veried the correctness and appropriateness of nancial records and Books of Accounts of the Company;

4. Wherever required, we have obtained the Management Representation about the compliance of laws, rules and regulations and happening of events etc;

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verication of procedure on test basis;

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efcacy or effectiveness with which the management has conducted the affairs of the Company.

We report that adequate notice was given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarications on the agenda items before the meeting and for meaningful participation at the meeting. decisions of the Board were taken with the requisite majority and recorded as part of the minutes.

We further report that based on the information provided by the Company during the Audit Period and also on the review of quarterly compliance reports taken on record by the Board of Directors of the Company, in our opinion, adequate systems and processes and control mechanisms exist in the Company to monitor and ensure compliance with applicable general laws.

We further report that during the Audit Period, the Company has not incurred any specic event/ action that can have a major bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc.

Place: Kolkata

Date: 18th May, 2018

LIST OF DOCUMENTS

1. Corporate Matters

1.1 Minutes books of the following meetings were provided in original;

1.1.1 Board Meeting;

1.1.2 Audit Committee;

1.1.3 Nomination and Remuneration Committee;

1.1.4 Stakeholders Relationship Committee;

1.1.5 Corporate Social Responsibility Committee;

1.1.6 Risk Management Committee;

1.1.7 General Meeting;

1.2 Agenda papers for Board Meeting along with Notice;

1.3 Annual Report for the Financial Year 2016-17;

1.4 Memorandum and Articles of Association;

1.5 Disclosures under the Act and Listing Regulations;

1.6 Policies framed under the Act and Listing Regulations;

1.7 Documents pertaining to Listing Agreement/ Listing Regulations compliance;

1.8 Documents pertaining to proof of payment of Dividend;

1.9 Registers maintained under the Act;

1.10 Forms and Returns led with MCA and RBI

1.11 Documents under SEBI (Prohibition of Insider Trading) Regulations, 2015

1.12 Disclosures under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

ANNEXURE- A1

For Vinod Kothari & Company

Practising Company Secretaries

Arun Kumar Maitra

(Partner)

Membership No.A3010

C P No.: 14490



Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo required under the Companies(Accounts) Rules, 2014


(A) Conservation of Energy

(i) The steps taken for conservation of energy:

Major energy conservation initiative taken during the nancial year 2017-18:

Ÿ Installed VFDs to reduce power consumption.

Ÿ Replaced the power capacitor to improve the power factor.

Ÿ Installed LED lights.

Ÿ Replaced the pumps of Boiler Feed Water, Methanol Transfer, Raw Water and DM Water with energy efcient pumps.

Ÿ Installed the condensate recovery system to improve steam generation.

Ÿ Process has been modied to reduce steam consumption.

(ii) The steps taken by the Company for utilizing alternate sources of energy: NIL

(iii) The capital investment on energy conservation equipments: Rs.0.43 million

(B) Technology Absorption

(i) The efforts made towards technology absorption: NIL

(ii) The benets derived like product improvement, cost reduction, product development or import substitution: NIL

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the nancial year):

(iv) The expenditure incurred on Research and Development: Rs. 5.31 million.

(a) The details of technology imported Technological upgrada�on of Formaldehyde process from Johnson Ma�hey Formox, Sweden

(b) The year of import 2015-16

(c) Whether the technology been fully absorbed Yes

(d) If not fully absorbed, areas where absorp�on has not taken place, and the reasons thereof

Not Applicable

(C) Foreign Exchange Earnings and Outgo

Foreign Exchange earned in terms of actual inflows during the year 229.90

Foreign Exchange outgo in terms of actual ou�lows during the year 654.03

(Rs. in million)


R.V. Kanoria

Chairman & Managing Director

DIN:00003792

Registered Office

'Park Plaza'

71, Park Street

Kolkata-700 016thDate: 18 May 2018



1. Ratio of remuneration of each Director to the median remuneration of all employees and percentage increase in remuneration of each Director, Chief

Financial Ofcer, Company Secretary or Manager, if any, in the nancial year:


A. Information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Sl. No.

Name of Directors andKey Managerial Personnel

Designa�on The ra�o of remunera�on ofeach Director to the median

remunera�on of all employeesof the Company for thefinancial year 2017-18

Percentage increase in remunera�on of each Director,

Chief Financial Officer and Company Secretary in the

financial year 2017-18

1 Shri R.V. Kanoria Chairman & Managing Director

51.63 22.94

2 Shri S. V. Kanoria Whole�me Director 21.59 46.53

3 Shri Amitav Kothari Non-Execu�ve Independent Director 0.81 -

4 Shri H.K. Khaitan Non-Execu�ve Independent Director 1.01 12.70

5 Shri Ravinder Nath Non-Execu�ve Independent Director 0.54 11.76

6 Shri G. Parthasarathy Non-Execu�ve Independent Director 0.74 52.94

7 Prof. S.L. Rao Non-Execu�ve Independent Director 0.51 12.50

8 Shri A. Vellayan Non-Execu�ve Independent Director 0.29 100.00

9 Smt. Madhuvan� Kanoria Non-Execu�ve Director 0.60 2.44

10 Shri N.K. Nolkha Group Chief Financial Officer NA 14.48

11 Shri N.K. Sethia Company Secretary NA 11.48

Notes: No Director other than the Chairman & Managing Director and Whole time Director received any remuneration other than sitting fees during the financial years 2016-17

and 2017-18.

2. The number of permanent employees as on 31st March, 2018 was 310.

3. Compared to the year 2016-17, the gures for the year 2017-18 reects that:-

(i) Median remuneration of the employees has increased by 9.02%.

(ii) Average remuneration of the employees increased by 10.50%.

(iii) Average remuneration of the employees excluding Key Managerial Personnel increased by 8.87% and average remuneration of Key Managerial

Personnel increased by 24.76%.

The remuneration of Directors, Key Managerial Personnel and other employees is in accordance with the Remuneration Policy of the Company.



Top 10 Employees in terms of remuneration drawn

B. Particulars of employees pursuant to provisions of Section 197 (12) of the Companies Act, 2013, read with Rules 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

(i) Employees in receipt of remuneration aggregating to not less than Rs. 1.02 Crore per annum or Rs. 8.5 Lakh per month

Sl. No.

Name and Age Designa�on Remunera�on(Rs.)

Qualifica�on and Experience Date of Joining

Last Employment

1 R. V. Kanoria(63 years)


18,077,949 B.Sc., MBA (Hons)(44 Years)

10.01.1983 -

Sl. No.

Name and Age Designa�on Remunera�on(Rs.)

Qualifica�on and Experience Date of Joining

Last Employment

2 S. V. Kanoria(36 Years)

Whole�me Director 7,561,120 MS in Computer Science(14 Years)

21.08.2006 Morgan Stanley, USA

3 N. K. Nolkha(51 Years)


6,047,836 B. Com (Hons), ACA(30 Years)

02.04.1991 G. R. Magnets Limited

4 Arun Kumar Agarwal (59 Years)

Chief Execu�ve –Chemicals Business

5,864,640 B. Com (Hons), FCA, ACS(36 Years)

01.10.1990 Jayshree Tea &Industries Limited

5 Rajesh Sharma(56 Years)

President – Works 4,767,840 B. E. (Chemicals)(30 years)

21.02.2017 TWIGA Manufacturers Limited, Tanzania

6 Anil D Mishra(47 Years)

Sr. General Manager (EHS)

3,038,352 M. Tech. (Environment)(21 Years)

20.12,2004 Khemani Dis�lleries Pvt. Limited

7 Vaidehi Kanoria(34 Years)

General Manager – Human Resource

2,920,964 B.Sc. (Economics)(10 Years)

21.09.2010 Gallery Espace Art

8 B. Panangadan(56 Years)

Asst. Vice President - Business Development

2,663,404 PG Diploma in Financial Mgmt,B. Tech - Electrical Engg.

(33 Years)

01.09.2011 K S Oils Limited, DGM

9 Sanjay Kumar Ojha (46 Years)

Vice President (Works) 2,647,567 B.E. (Mechanical)(21 Years)

11.06.2007 United Phosphorus Limited

10 Narendra Kumar Sethia(57 Years)

Company Secretary 2,617,008 B.Com (Hons), FCS, LL.B., MBA(32 Years)

06.08.2005 Navjyo� Investment & Dealers Limited

(ii) Other Employees

Notes: Remuneration includes Salary, House Rent Allowance, Company's contribution to Provident Fund, Leave Travel Assistance, Medical and other facilities, as applicable.

All the appointments are on employment agreement basis, except for executive Directors which are contractual.

Shri R.V. Kanoria, Chairman & Managing Director is spouse of Smt. Madhuvanti Kanoria, a Director of the Company. Shri S.V. Kanoria, Wholetime Director is son of Shri. R.V. Kanoria

and Smt. Madhuvanti Kanoria.

The gures are on mercantile basis.


R.V. Kanoria


DIN:00003792

Registered Office

'Park Plaza'

71, Park Street




REPORT ON CORPORATEGOVERNANCEINTRODUCTIONYour Company has complied with the provisions of Corporate Governance as stipulated in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations, 2015”).

A Report on the implementation of Corporate Governance by the Company as per the Listing Regulations, 2015 is given below.

COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCECorporate Governance is commitment to values and integrity in directing the affairs of the Company. It is an integral part of the Company's strategic management. Its basic tenets – adherence to ethical business practices; delegation; responsibility and accountability; honesty and transparency in the functioning of management and the Board; true, complete and timely disclosures; and compliance of law, ultimately result in maximising shareholders value and in protecting the interests of stakeholders.

The Company is committed to and always strives for excellence through adoption of and adherence to good corporate governance in the true spirit.

The Company is guided by a well-balanced Board comprising Directors, who are all outstanding professionals of eminence and integrity. Strategic management by a professional Board is the focal point of the Company's Corporate Governance philosophy and practice.

A core group of top-level executives further strengthens and reinforces the foundation of Corporate Governance in the Company. Competent professionals across the organisation have put in place the best in terms of systems, processes, procedures and technologies.

BOARD OF DIRECTORS

CompositionstThe Board as on 31 March 2018 consisted of nine Directors including seven Non-executive Directors out of which six are Independent Directors.

Shri R.V. Kanoria, B.Sc., MBA (Hons.), representing the promoters is holding the executive position and is designated as the Chairman & Managing Director of the Company. He has 44 years of industrial, managerial, administrative and commercial experience. Shri S.V. Kanoria, an MS in Computer Science having 14 years work experience, is the Wholetime Director of the Company.

th th th thDuring the year under review, the Board met four times; on 30 May 2017, 8 August 2017, 14 November 2017 and 12 February 2018. stThe constitution of the Board during the year ended 31 March 2018 and attendance at the Board Meetings, last Annual General Meeting and the Directorship,

stChairmanship and/or Membership of Committees held as on 31 March 2018 by each Director in other companies are as under:

Name of Director A�endance at Category of Directors Other 1Directorship

Other Commi�ee

2Chairmansip

Other Commi�ee

2MembershipBoard

Mee�ngsLast

AGM

Shri R.V. Kanoria (DIN: 00003792) 4 Yes Promoter – Chairman & Managing Director 7 2 4

Smt. Madhuvan� Kanoria (DIN: 00142146) 4 Yes Non-Execu�ve Non-Independent Director - - -

Shri S. V. Kanoria (DIN: 02097441) 3 Yes Execu�ve Director 4 - -

Shri Amitav Kothari (DIN:01097705) 4 Yes Non - Execu�ve Independent Director 3 1 2

Shri H.K. Khaitan (DIN:00220049) 4 Yes Non - Execu�ve Independent Director 4 1 2

Shri Ravinder Nath (DIN:00062186) 3 Yes Non - Execu�ve Independent Director 3 1 2

Shri G. Parthasarathy (DIN:00068510) 4 Yes Non - Execu�ve Independent Director - - -

Prof. S.L. Rao (DIN:00005675) 2 No Non - Execu�ve Independent Director 1 - 1

Shri A. Vellayan (DIN:00148891) 2 No Non - Execu�ve Independent Director 1 - 2

1 This excludes Directorship held in Indian Private Limited Companies, Foreign Companies, Companies under Section 8 of the Companies Act, 2013. 2 Committee refers to Audit Committee and Stakeholders Relationship Committee.





Notes

i Smt. Madhuvanti Kanoria is spouse of Shri R.V. Kanoria. Shri S.V. Kanoria, Wholetime Director, is son of Shri R.V. Kanoria and Smt. Madhuvanti Kanoria.

None of the other Directors is related to any other Director on the Board.

ii None of the Directors has any business relationship with the Company.

iii The Company has a woman Director on its Board of Directors.

iv None of the Directors received any loans and advances from the Company during the year.

v None of the Directors holds Directorships in more than the permissible number of companies under the Companies Act, 2013 or

Directorships/Membership/Chairmanship of Board Committees as permissible under Regulations 25 and 26 of the Listing Regulations, 2015.

vi All the Directors have certied that they are not disqualied for appointment as a Director in any company.

vii Additional information pursuant to the Listing Regulations, 2015 in respect of Director seeking appointment/re-appointment is given in the AGM Notice.

Responsibilities

The Board's prime concentration is on strategy, policy and control, delegation of power and specifying approvals that remain in the Board's domain besides review

of corporate performance and reporting to shareholders. The Board and Management's roles are clearly demarcated.

The Management is required to:

a) provide necessary inputs to assist the Board in its decision making process in respect of the Company's strategies, policies, performance targets and

code of conduct;

b) manage day-to-day affairs of the Company to achieve targets and goals set by the Board in the best possible manner;

c) implement all policies and the code of conduct as approved by the Board;

d) provide timely, accurate, substantive and material information, including on all nancial matters and any exceptions, to the Board and/or its

Committees;

e) ensure strict compliance with all applicable laws and regulations; and

f) implement sound and effective internal control systems.

The management and the conduct of the affairs of the Company lie with the Managing Director who heads the management team.

Role of Independent Directors

The Independent Directors play an important role in deliberations and decision-making at the Board Meetings and bring to the Company wide experiences in their

respective elds. They also contribute in signicant measure to Board Committees. Their independent role vis-à-vis the Company means that they have a special

contribution to make in situations where they add a broader perspective by ensuring that the interests of all stakeholders are kept in acceptable balance and in

providing an objective view in instances where a (potential) conict of interests may arise between stakeholders.

Meetings of Independent Directors

The Company's Independent Directors meet at least once in every nancial year without the presence of Executive Directors or Management Personnel. During the

year under review, one Meeting of Independent Directors was held on 12th February 2018, wherein the Independent Directors carried out the performance

evaluation of the Chairman & Managing Director, Executive Director and other non-independent Director as well as the Board of the Company. The Meeting also

assessed the quality, quantity and timeliness of the ow of information by the Management of the Company to the Board of Directors.

Familiarisation Programmes for Board Members

The Board Members are provided with necessary documents, reports and internal policies to enable them to familiarise with the Company's procedures and

practices. Periodic presentations are made at the Board and Board Committees, on business and performance updates of the Company. Relevant statutory

changes encompassing important laws are regularly made available to the Directors. Efforts are also made to familiarise the Directors about the Company, their

roles, rights, responsibility in the Company, nature of the industry in which the Company operates, business model/procedures/processes of the Company, etc.

through various programmes including plant visits. The details of the familiarisation programmes for Independent Directors are put on the website of the

Company and can be accessed at the link: www.kanoriachem.com/images/FamPro.pdf.

BOARD MEETINGS

Selection of Agenda Items for Board Meetings

i) The Company holds a minimum of four Board Meetings in each year, which are pre-scheduled after the end of each nancial quarter. The gap between two

Meetings is not more than 120 days. Apart from the four pre-scheduled Board Meetings, additional Board Meetings are convened by giving appropriate

notice to address the specic needs of the Company.

ii) All divisions and departments in the Company are encouraged to plan their functions well in advance, particularly with regard to matters requiring discussion

and approval by the Board or by Committees. All such matters are communicated to the Company Secretary in advance so that these may be included in the

Agenda for the Board or Committee Meetings.

iii) At the beginning of each meeting of the Board, the Chairman & Managing Director briefs the Board members about the key developments relating to the

Company.

iv) At each of the four pre-scheduled Board Meetings, managers are invited to make presentations on the major business segments and operations of the

Company before taking on record the results of the Company for the preceding nancial quarter. Sufcient support information is provided to the Board in

advance for all strategic matters of signicance pertaining to expansion plans, nancing and diversications. These are discussed and deliberated in detail

at the Board level.

v) Among others, the following items are placed at the Board Meetings for the consideration/review/approval of the Board:

- Annual Operating Plans and Budgets and any updates.

- Capital Budgets and any updates.

- Quarterly results of the Company and its Business Segments.

- Minutes of Meetings of the Board Committees.

- The information on recruitment and remuneration of senior ofcers just below the Board level, including appointment or removal of Chief Financial Ofcer

and the Company Secretary.

- Show cause, demand, prosecution notices and penalty notices, which are materially important

- Fatal or serious accidents, dangerous occurrences, any material efuent or pollution problems.

- Any material default in nancial obligations to and by the Company, or substantial non payment for goods sold by the Company.

- Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed

strictures on the conduct of the Company or taken an adverse view regarding another enterprise that can have negative implications on the Company.

- Details of any Joint Venture or Collaboration Agreement.

- Transactions that involve substantial payment towards goodwill, brand equity, or intellectual property.

- Signicant labour problems and their proposed solutions. Any signicant development in Human Resources/ Industrial Relations front like signing of wage

agreement, implementation of Voluntary Retirement Scheme etc.

- Sale of material nature of investments, subsidiaries, assets, which is not in normal course of business.

- Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material.

- Non-compliance of any regulatory, statutory or listing requirements and shareholders service such as non-payment of dividend, delay in share transfer etc.

In addition, the other matters requiring the Board's consideration/review/approval, from time to time, are also placed at the Board Meetings. The Board's annual

agenda includes recommending dividend, determining Directors who shall retire by rotation and recommending appointment/reappointment of Directors and

Auditors, authentication of annual accounts and approving the Directors' Report, long term strategic plans for the Company and the principal issues that the

Company expects to face in the future. The Board also considers/approves the other matters as required to be considered/approved by the Board as per the

Companies Act, 2013 and the Listing Regulations, 2015. Board Meetings also note and review the functions of its Committees.

The Chairman of the Board and the Company Secretary in consultation with other concerned persons in senior management nalise the agenda papers for the

Board Meeting. Directors have access to the Company Secretary's support for all information of the Company and are free to suggest inclusion of any matter in the

Agenda.

Board Material Distributed in Advance

i) Agenda Papers are circulated to the Directors in advance. All material information is incorporated in the Agenda Papers for facilitating meaningful and

focussed discussions at the Meeting. Where it is not practicable to attach any documents to the Agenda, the same are placed on the table at the Meeting with

specic reference to this effect in the Agenda.

ii) In special and exceptional circumstances, additional or supplementary items on the Agenda are permitted to be taken at the Meeting.





Recording Minutes of Proceedings at Board and/or Committee Meetings

The Company Secretary records the minutes of the proceedings of each Board and Committee Meeting. Draft Minutes are circulated to all the members of the

Board for their comments. The Minutes of proceedings of a Meeting are entered in the Minutes Book within 30 days from the conclusion of the Meeting.

Compliance

The Company Secretary while preparing the agenda, notes on agenda and minutes of the Meetings, ensures adherence to the applicable provisions of law

including the Companies Act 2013, Secretarial Standards and the Listing Regulations, 2015.

BOARD COMMITTEESTo enable better and focussed attention on the affairs of the Company, the Board delegates specic matters to its Committees. These Committees also prepare the

groundwork for decision-making and report at the subsequent Board Meetings. No matter, however, is left to the nal decision of any Committee, which under the

law or the Articles may not be delegated by the Board or may require the Board's explicit approval. Minutes of the Committee Meetings are circulated to all

Directors and discussed at the Board Meetings.

Audit Committee

The Audit Committee comprises of Shri Amitav Kothari, Shri H. K. Khaitan and Prof. S. L. Rao, Independent Directors, and Shri R.V. Kanoria, Chairman & Managing

Director of the Company. Shri Amitav Kothari is the Chairman of the Committee. The Members of the Committee have requisite knowledge of nance, accounts

and Company law.

The Audit Committee's constitution, terms of reference and role are in compliance with the Companies Act, 2013 and the Listing Regulations, 2015. The terms of

reference of the Audit Committee inter alia include the following:

a) Recommendation for appointment, remuneration and terms of appointment of Auditors of the company;

b) Approval of payment to Statutory Auditors for rendering of any other services;

c) Review and monitor the Auditor's independence and performance, and effectiveness of audit process;

d) Reviewing with the Management, the Annual Financial Statement and the Auditors Report thereon before submission to the Board for approval.

e) Reviewing, with the Management, the quarterly Financial Statement before submission to the Board for approval.

f) Oversight of the Company's nancial reporting process and the disclosure of its nancial information to ensure that the nancial statement is correct,

sufcient and credible.

g) Approval or any subsequent modication of transactions of the Company with related parties;

h) Scrutiny of inter-corporate loans and investments;

i) Valuation of undertakings or assets of the Company, wherever it is necessary;

j) Evaluation of internal nancial controls and risk management systems;

k) Monitoring the end use of funds raised through public offers and related matters;

l) Review of appointment, removal and terms of remuneration of Internal Auditor.

m) Review of Internal Audit Reports and follow up of any signicant ndings therein;

n) Discussion with Statutory Auditors post-audit to ascertain any area of concern;

o) To review the functioning of the Whistle Blower mechanism;

p) Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the nance function or discharging that function) after

assessing the qualications, experience and background, etc. of the candidate.

In addition, to carry out any other function as may be referred, from time to time, by the Board of Directors or enforced by any statutory notication/amendment or

modication as may be applicable.

The Company Secretary acts as the Secretary of the Audit Committee.

During the nancial year 2017-18, the Committee met four times; on 30th May 2017, 8th August 2017, 14th November 2017 and 12th February 2018.

Attendance of Members at Audit Committee Meetings held during the year 2017-18:

Name of Director No. of Mee�ngs a�ended

Shri Amitav Kothari 4

Shri R. V. Kanoria 4

Shri H.K. Khaitan 4

Prof. S. L. Rao 2

The Chairman of the Audit Committee was present at the last Annual General Meeting held on 4th September, 2017.

Stakeholders Relationship Committee

The Stakeholders Relationship Committee comprises of Shri H. K. Khaitan and Shri Amitav Kothari, Independent Directors and Shri S.V. Kanoria, Wholetime

Director of the Company. Shri H. K. Khaitan is the Chairman of the Committee.

The Committee's constitution, terms of reference and role are in compliance with the Companies Act, 2013 and the Listing Regulations, 2015, which comprise the

following:-

i To consider and resolve the grievances of security holders of the Company, including complaints related to transfer of shares, non-receipt of balance sheet,

non-receipt of declared dividends.

ii To carry out any other function as is referred to the Committee by the Board of Directors from time to time or enforced by any statutory

notication/amendment or modication as may be applicable.

Shri N.K. Sethia, Company Secretary and Compliance Ofcer under the relevant regulations, has been delegated authority to attend to Share transfer formalities

at least once in a fortnight.

There were two share transfers involving 12 Equity Shares pending for registration as at the end of the nancial year 2017-18, which have since been registered.

Besides these, there are no shares pending for transfer except the sub-judice matters, which would be solved on nal disposal by Hon'ble Courts.

During the year under review, the Company attended the stakeholders' correspondence within a period of seven days from the date of the receipt of such

correspondence.

During the year, no complaint was received and at the end of the year, no complaint was pending for resolution.

During the nancial year 2017-18, the Committee met on 30th May, 2017, wherein Shri H. K. Khaitan and Shri Amitav Kothari were present.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises of Prof. S. L. Rao, Shri H. K. Khaitan, Shri G. Parthasarathy and Shri Ravinder Nath, Independent

Directors and Shri R.V. Kanoria, the Chairman & Managing Director of the Company. Prof S. L. Rao is the Chairman of the Committee.

The Nomination and Remuneration Committee's constitution, terms of reference and role are in compliance with the Companies Act, 2013 and the Listing

Regulations, 2015. The terms of reference of the Nomination and Remuneration Committee inter alia include the following:-

i Identication of persons who are qualied to become Directors and who may be appointed in senior management in accordance with the criteria laid down,

recommend to the Board their appointment and removal and carry out evaluation of every Director's performance.

ii Formulation of the criteria for determining qualications, positive attributes and independence of a Director and recommend to the Board a policy, relating

to the remuneration for the directors, key managerial personnel and other employees and ensure that:-

a. the level and composition of remuneration is reasonable and sufcient to attract, retain and motivate Directors of the quality required to run the

company successfully;

b. relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

c. remuneration to Directors, Key Managerial Personnel and senior management involves a balance between xed and incentive pay reecting short and

long-term performance objectives appropriate to the working of the company and its goals.

iii To formulate criteria for performance evaluation of Independent Directors and the Board;

iv Devising a policy on Board diversity;

In addition, to carry out any other function as may be referred, from time to time, by the Board of Directors or enforced by any statutory notication/amendment or


During the nancial year 2017-18, the Committee met on 30th May, 2017, 14th November, 2017 and 12th February 2018.

Attendance of Members at Nomination and Remuneration Committee Meetings held during the year 2017-18:

Name of Director No. of Mee�ngs a�ended

Prof. S. L. Rao 2

Shri R. V. Kanoria 3

Shri H.K. Khaitan 3

Shri Ravinder Nath 2

Shri G. Parthasarathy 3





The Chairman of the Nomination and Remuneration Committee authorised Shri H. K. Khaitan to represent him at the last Annual General Meeting held on 4th

September, 2017.

The Board of Directors of the Company, based on the recommendation of the Nomination and Remuneration Committee, has formulated the Nomination and

Remuneration Policy, which contains the matters with regard to criteria for appointment of Directors and determining Directors independence and policy on

remuneration for Directors, Senior Managerial Personnel and other employees.

Criteria for Appointment of Directors

In evaluating the suitability of a person and recommending to the Board his appointment as a Director of the Company, the Nomination and Remuneration

Committee may take into account and ascertain factors such as:

i Personal and professional ethics, integrity and values

ii Educational and professional background

iii Willingness to devote sufcient time and energy in carrying out the duties and responsibilities effectively

Remuneration Policy

The Company's Remuneration Policy has been formulated, keeping in view the following guiding principles:-

i Ensuring that the remuneration and other terms of employment are as per the trends and practices prevailing in peer companies and the industry.

ii Providing reward commensurate with the efforts, dedication and achievement in performance of duty.

iii Attracting, retaining, motivating and promoting talent and ensuring long term sustainability of talented personnel and create competitive advantage.

The Remuneration Policy is in consonance with the existing Industry practice.

The Managing Director and Wholetime Director are paid remuneration as per their agreements with the Company. These agreements are approved by the Board,

on the recommendation of the Nomination and Remuneration Committee, and then also placed before the shareholders for their approval. The remuneration

structure of the Managing Director and the Wholetime Director comprises salary, perquisites, other benets and commission (payable on the net prots of the

Company, calculated as per the applicable provisions of the Companies Act, 2013). The Managing Director and Wholetime Director are not paid sitting fee for

attending Meetings of the Board or Committees thereof.

Non-Executive/Independent Directors receive remuneration by way of fees for attending Meetings of Board or Committee thereof, as xed by the Board of

Directors from time to time, within the limits as prescribed under the applicable law. They are paid a sitting fee of Rs.50,000/- for attending each Board Meeting.

The sitting fee for attending each Audit Committee Meeting and each Nomination and Remuneration Committee Meeting is Rs. 20,000/- and it is Rs.5,000/- for

attending other Committee Meeting respectively. Non-Executive/Independent Directors are also reimbursed for expenses incurred for participation in Meetings of

the shareholders, the Board of Directors or Committee thereof or for any other purpose in connection with the business of the Company as permissible under the

applicable law. There are no stock option benets to any of the Directors.

The remuneration of the Senior Management Personnel of the Company is guided by the competitiveness and is based on the individual person's key

responsibilities and performance. They may receive variable pay in addition to xed salaries. The performance-based pay to the SMP, including revisions, if any,

would be based on the individual's performance related to the fullment of various improvement targets or the attainment of certain objectives.

The other employees' remuneration is determined within the appropriate grade and is based on various factors such as job prole, skill sets, seniority, experience

and prevailing remuneration levels for equivalent jobs.

The Nomination and Remuneration Policy may be accessed at the Company's website at the link: www.kanoriachem.com/images/NomRemPol.pdf.

Criteria for Performance Evaluation of Directors

The criteria for performance evaluation of Directors among others includes factors such as preparation, participation, engagement, personality and conduct,

value addition, strategic planning and vision, team spirit and consensus building, leadership quality, understanding and focus on key business issues,

independent thinking and judgment, quality of analysis, experience and business wisdom, management qualities, awareness, motivation, integrity, ethics and

receptivity.

stDetails of Remuneration paid or payable to Directors for the Financial Year ended 31 March 2018

Name of Director Salary Perquisites and other benefits

Commission Si�ng Fees** Total

Shri R.V. Kanoria 10,238,710 7,839,239 - - 18,077,949*

Shri Amitav Kothari - - - 285,000 285,000

Shri H.K. Khaitan - - - 355,000 355,000

Shri Ravinder Nath - - - 190,000 190,000

Shri G. Parthasarathy - - - 260,000 260,000

Prof. S.L. Rao - - - 180,000 180,000

Shri A. Vellayan - - - 100,000 100,000

Smt Madhuvan� Kanoria - - - 210,000 210,000

Shri S. V. Kanoria 3,750,000 3,811,120 - - 7,561,120

* Includes remuneration of Rs. 4,529,963 from 10.01.2018 to 31.03.2018, subject to shareholders' approval. ** Includes Sitting Fee paid for Committee Meetings.

Details of Agreement

Name From to Tenure

Shri R.V. Kanoria - Managing Director# 10.01.2018 09.01.2021 3 years

Shri S. V. Kanoria - Whole�me Director* 01.04.2016 31.03.2019 3 years

# Subject to shareholders approval.* For termination of agreement, the Company and the Whole time Director are required to give a notice of three months or three months' salary in lieu thereof.

Equity Shares of the Company held by Directors

The Directors, who held the Equity Shares of the Company as on 31st March 2018 are Shri R.V. Kanoria (461,481), Smt. Madhuvanti Kanoria (498,321), Shri S.V.

Kanoria (556,440), Shri A. Vellayan (15,000), Shri H. K. Khaitan (100), Prof. S. L. Rao (10), Shri Ravinder Nath (100), Shri Amitav Kothari (4) and Shri G.

Parthasarathy (1).

Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee comprises of Smt. Madhuvanti Kanoria, Director, Shri R.V. Kanoria, Managing Director and Shri H. K. Khaitan, an

Independent Director. Smt. Madhuvanti Kanoria is the Chairperson of the Committee.

The Committee's constitution, terms of reference and role are in compliance with the provisions of the Companies Act, 2013.

The terms of reference of the Corporate Social Responsibility Committee comprise the following:-

i To formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the Company as

specied in Schedule VII to the Companies Act, 2013;

ii To recommend to the Board the amount of expenditure to be incurred on the activities as referred to in clause (i) above;

iii To monitor the Corporate Social Responsibility Policy of the Company from time to time.

In addition, to carry out any other function as may be referred from time to time by the Board of Directors or enforced by any statutory notication/amendment or


During the nancial year 2017-18, the Committee met two times: on 30th May 2017 and 14th November 2017, wherein all the Members were present.

The CSR Policy may be accessed at the Company's website at the link: www.kanoriachem.com/images/CSRPol.pdf.

Finance Committee

The Finance Committee comprises of Shri R.V. Kanoria, Managing Director, Shri H.K. Khaitan, Shri Amitav Kothari, Independent Directors and Shri S.V. Kanoria,

Wholetime Director. Shri R.V. Kanoria is the Chairman of the Committee.

The Committee determines on behalf of the Board, the matters relating to Debentures, Term Loans, Commercial Paper and any other types of Financial Assistance

from Financial Institutions, Banks, Mutual Funds and Others, creation of securities and allotment of securities etc. and other matters related and incidental

therewith.

In addition, the Committee also carries out any other function as may be referred from time to time by the Board of Directors. During the nancial year 2017-18,

the Committee met on 17th April, 2017 in which Shri R.V. Kanoria and Shri S.V. Kanoria were present.





OTHER COMMITTEE

Risk Management Committee

The Risk Management Committee of the Company comprises of Shri R.V. Kanoria, Managing Director, Shri S.V. Kanoria, Wholetime Director, Shri H. K. Khaitan,

Independent Director, Shri N.K. Nolkha - Group Chief Financial Ofcer and Shri Arun Agarwal – Chief Executive, Chemical Business. Shri R.V. Kanoria is the

Chairman of the Committee.

The Risk Management Committee assesses the signicant risks that might impact the achievement of the Company's objectives and develops risk management

strategies to mitigate/minimise identied risks and designs appropriate risk management procedures.

During the year under review, the Committee met on 8th August 2017 and 12th February 2018.

GENERAL BODY MEETINGS

The last three Annual General Meetings of the Company were held as per details given below:

Year Date Time Venue No. of Special Resolu�on(s) passed

2016-17 st4 September 2017 02.30 P.M 'Shripa� Singhania Hall',Rotary Sadan,

94/2 Chowringhee Road,Kolkata-700 020

NIL

2015-16 st1 September 2016 10.30 A.M 1

2014-15 th1 September 2015 10.30 A.M 1

There was no resolution passed through Postal Ballot during the year under review. At the ensuing Annual General Meeting, there is no resolution proposed to be

passed by Postal Ballot.

SUBSIDIARY COMPANIES

The Audit Committee reviews the nancial statements, particularly the investments made by the subsidiary companies. The minutes of the Board Meetings of the

subsidiary companies are placed at the Board Meetings of the Company.

The Policy for determining Material Subsidiaries as approved by the Board may be accessed on the Company's website at the link:

www.kanoriachem.com/images/MatSub.pdf.

DISCLOSURES:

RELATED PARTY TRANSACTIONS

During the year under review, the Company had not entered into any material transaction with any of its related parties. All contracts / arrangements /

transactions entered by the Company during the nancial year with related parties were in the ordinary course of business and on arm's length basis.

None of the transactions with any of the related parties were in conict with the Company's interest. Suitable disclosure as required by the Indian Accounting

Standards (Ind AS 24) has been made in the Note No. 41 to the Standalone Financial Statements, forming part of the Annual Report There are no pecuniary

relationships or transactions with the non-executive Director and Independent Directors. The Policy on Related Party Transactions as approved by the Board of

Directors may be accessed on the Company's website at the link: www.kanoriachem.com/images/RelPar.pdf.

MEANS OF COMMUNICATION

The quarterly and annual nancial results were taken on record and approved within the prescribed time limits. The approved results were thereafter sent to the

Stock Exchanges and also posted on website of the Company for the information of shareholders/investors.

The nancial results were also published in leading dailies “Business Standard” (English Daily all editions) and “Ei Samay” / ”Aajkaal” (vernacular language -

Bengali newspapers) within 48 hours of the Meeting.

As the Company publishes its half-yearly results in English newspapers having nationwide circulation and in a vernacular language (Bengali), the details of

nancial performance is not sent individually to each shareholder of the Company.

The Company issues ofcial press releases to the print media from time to time and also updates Analysts on the activities of the Company.

The Company has its own website www.kanoriachem.com where information about the Company is displayed and regularly updated. An e-mail ID

[email protected] has been created and displayed on the Company's website for the purpose of interaction including registering complaints by the

investors.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis is a part of the Annual Report.

CEO AND CFO CERTIFICATION

As required under Regulation 17(8) of the Listing Regulations, 2015, the Managing Director and the Group Chief Financial Ofcer of the Company have certied to

the Board regarding review of nancial statement for the year under review, compliance with the accounting standards and applicable laws and regulations,

maintenance of internal control for nancial reporting and accounting policies.

CODE OF CONDUCT

The Company has Codes of Conduct for its Directors and Senior Management Personnel as well as for its other Employees. The Codes of Conduct are available on

the Company's website.

It is conrmed that all the Board Members and Senior Management Personnel of the Company have afrmed their compliance with the Company's Code of

Conduct for Directors and Senior Management Personnel for the nancial year 2017-18, as required under Regulation 26(3) of the Listing Regulations, 2015 and

a declaration to this effect signed by the Chairman & Managing Director forms part of the Annual Report.

WHISTLE BLOWER POLICY

In compliance with provisions of Section 177(9) of the Companies Act, 2013 and the Listing Regulations, 2015, the Company has in place a Whistle Blower Policy

for its Directors and Employees to report concerns about unethical behaviour, actual or suspected fraud or violation of applicable laws and regulations and the

Company's Codes of Conduct. The concerns may be reported to the Audit Committee through the Nodal Ofcer and, in exceptional cases, may also be reported to

the Chairman of the Audit Committee. During the year under review, no employee was denied access to the Audit Committee.

TRANSFER OF SHARES TO IEPF AUTHORITY

As required under Section 124(6) of the Companies Act, 2013, during the year the Company has transferred 112,846 Equity Shares of Rs. 5/- each of the

Company, on which dividend has remained unclaimed/unpaid for a continuous period of 7 years or more, to the Demat Account of the Investors Education and

Protection Fund (IEPF) Authority.

UNCLAIMED SHARES

Pursuant to Regulation 39 of the Listing Regulations, 2015, for the unclaimed shares issued in physical form and remaining unclaimed, the Company has a

separate “Unclaimed Suspense Account.” The particulars of Unclaimed Suspense Account are as follows:

Par�culars No. of Shareholders No. of Shares

Aggregate number of shareholders and outstanding shares lying in the Unclaimed Suspense Account at the beginning of the year 193 116,628

Number of shareholders who approached the Company for transfer of shares from the Unclaimed Suspense Account during the year 2 2,250

Number of shareholders to whom shares were transferred from the Unclaimed Suspense Account during the year 2 2,250

Number of shares transferred to the Demat Account of the Investors Educa�on and Protec�on Fund (IEPF) Authority, as required under Sec�on 124(6) of the Companies Act, 2013

152 63,348

Aggregate number of shareholders and outstanding shares lying in the Unclaimed Suspense Account at the end of the year. The vo�ng rights on these shares shall remain frozen �ll the righ�ul owner of such shares claims the shares.

39 51,030

COMPLIANCE OF MATTERS RELATED TO CAPITAL MARKETS

There has been no non-compliance, penalties or strictures imposed on the Company by Stock Exchanges or SEBI or any other Statutory Authorities, on any matter

related to capital markets during the last three years.





1. Annual General Mee�ng— Date and �me— Venue

th13 September 2018 at 3.00 P. M.'Shripa� Singhania Hall', Rotary Sadan94/2 Chowringhee Road, Kolkata-700 020

2. Financial Year Financial Calendar 2018-19(tenta�ve and subject to change)— Financial Results for the:

th quarter ending 30 June 2018th quarter ending 30 September 2018st quarter ending 31 December 2018

st year ending 31 March 2019

— Annual General Mee�ng 2018-19

st st1 April to 31 March

)) Within 45 days of end of respec�ve quarter)

thBy 30 May 2019

By September 2019

3. Date of Book Closure 7th September 2018 to 13th September 2018 (both days inclusive)

4. Dividend Payment Date On or a�er 19th September 2018 (subject to shareholders' approval)

5. Lis�ng on Stock Exchanges Na�onal Stock Exchange of India Ltd.'Exchange Plaza'Bandra-Kurla Complex, Bandra (E)Mumbai - 400 051www.nseindia.com

BSE LimitedP. J. Towers,Dalal Street, FortMumbai - 400 001www.bseindia.com

Note: Lis�ng fee for the year 2018-19 has been paid to the above Stock Exchanges.

6. Stock Code:BSE Ltd.Na�onal Stock Exchange of India Ltd.

50 6525KANORICHEM

7. Stock Price Data (in Rs./per share)

Months NSE* BSE*

High Low High Low

April 2017 79.50 70.05 79.50 71.00

May 2017 79.70 67.50 79.80 67.00

June 2017A p r i l 2 0 1 6 87.75 67.90 87.80 68.00

July 2017 99.75 78.75 99.80 79.15

August 2017 90.40 68.95 90.00 69.00

September 2017 94.00 75.15 93.80 75.70

October 2017 94.00 81.80 93.60 82.10

November 2017 108.60 81.95 108.70 81.10

December 2017 105.60 87.30 106.00 86.50

January 2018 112.50 87.55 112.50 88.05

February 2018 93.00 75.20 92.80 75.90

March 2018 80.40 63.10 78.00 63.50

COMPLIANCE OF MANDATORY AND NON-MANDATORY PROVISIONS OF THE CODE

(A) The Company has complied with all the mandatory requirements of the Listing Regulations, 2015.

(B) Following is the status of the compliance with the non-mandatory requirements of the said Regulations:

i) Audit Opinion:

For the year under review, the Auditors have expressed their unmodied opinion on the nancial statements of the Company.

ii) Reporting of Internal Auditor:

The Internal Auditor reports directly to the Audit Committee. The same is reported by brieng the Audit Committee through observations, review,

comments and recommendations etc. in the Internal Audit Reports by the Internal Auditor of the Company.

COMPLIANCE CERTIFICATE OF THE AUDITORS

The Statutory Auditors' Certicate that the Company has complied with the conditions of Corporate Governance as stipulated in the Listing Regulations, 2015 is

annexed hereto.

GENERAL SHAREHOLDERS' INFORMATION

* Source: Website of NSE and BSE

KCI Share Prices/BSE Sensex (Monthly High/Low)

April’17

May’17

June’17

July’17

Aug’17

Sept’17

Oct’17

Nov’17

Dec’17

Jan’18

Feb’18

Mar’18

BSE Sensex-High BSE Sensex-Low

Share Price- High Share Price- Low

0

5000

10000

BSE

Se

nse

x

40000

15000

20000

25000

30000

35000

0.00

20.00

40.00KC

I Sh

are

Pri

ces

(Rs.

)

120.00

60.00

80.00

100.00

8. Registrar and Share Transfer Agent C. B. Management Services (P) LimitedP-22, Bondel Road, Kolkata –700 019Phone : (033) 22806692, 40116700Fax : (033) 40116739Email : [email protected]

9. (a) Share Transfer System The share transfers which are received in physical form are processed within the prescribed �me from the date of receipt, subject to the documents being valid and complete in all respects.

Details of the share transfers during the year 2017-18:

No. of valid share transfer applica�ons received,processed and registered 19

No. of shares transferred 1,498

No. of share transfers in process as on 31.03.2018 12

No. of shares dematerialised 21,429

No. of shares rematerialized 2,250

(b) Dematerialisa�on of Shares and liquidity Depositories:

Na�onal Securi�es Depository Limited, Mumbai and Central Depository Services (India) Limited, Mumbai. The Equity Shares of the Company are compulsorily traded and se�led through Stock Exchanges only in the dematerialised form.

A total of 43,188,601 Equity Shares of the Company represen�ng 98.84% of the Share Capital are dematerialised as on 31st March 2018.

Under the Depository System, Interna�onal Securi�es Iden�fica�on Number (ISIN) allo�ed to the Company's Equity Shares is INE 138C01024.

Shares held in the dematerialised form are electronically transferred by the Depository Par�cipant and the Company is informed periodically by the Depositories about the beneficiary holdings to enable the Company to send corporate communica�on, dividend etc.

The requests received for dematerialisa�on are processed within a period of 10 days from the date of receipt of request provided they are in order in every respect.





The Company has connectivity with the Depositories, National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The

Annual Custody Fee for the nancial year 2018-19 has been paid by the Company to Central Depository Services (India) Limited (CDSL) and the same will be paid

to National Securities Depository Limited (NSDL) on receipt of the Invoice.

Shares held in electronic form- CDSL

9.23%

Shares held in physical form

1.16%

Shares held in electronic form- NSDL

89.61%

(c) Na�onal Electronic Clearing Service (NECS) for Dividend Your Company provides shareholders the op�on to receive dividend through the NECS facility. To avoid risk of loss and/or intercep�on of dividend instruments in postal transit and/or fraudulent encashment, shareholders are requested to avail the NECS facility, where dividends are directly credited in electronic form to their respec�ve bank accounts.

SEBI has mandated submission of the bank account details by the shareholders holding shares in physical form. This will enable the Company to incorporate this informa�on in dividend instruments to minimise the risk of fraudulent encashment.

10. stDistribu�on of Equity Shareholding as on 31 March 2018

Nominal value of Shareholding Number of Shareholders

% of Shareholders

Number of Equity Shares

% of Share Capital

Up to Rs.5,000 15,490 89.61 3,452,164 7.90

Rs. 5,001 - Rs.10,000 877 5.07 1,336,805 3.06

Rs.10,001 - Rs.20,000 524 3.03 1,494,125 3.42

Rs. 20,001 - Rs. 30,000 164 0.95 807,827 1.85

Rs.30,001 – Rs.40,000 63 0.36 446,512 1.02

Rs. 40,001 – Rs. 50,000 53 0.31 494,078 1.13

Rs. 50,001 – Rs. 1,00,000 68 0.39 996,161 2.28

Rs.1,00,001 and above 48 0.28 34,665,661 79.34

Total 17,287 100.00 43,693,333 100.00

11.stEquity Shareholding Pa�ern as on 31 March 2018

Category No. of Shares held % of Shareholding

FII/Foreign Na�onals & NRIs/OCB 355,919 0.81

Financial Ins�tu�ons / Insurance Companies 2,300 0.01

Banks & Mutual Funds 85,155 0.19

Promoters, Directors & their Rela�ves and associated companies 32,534,239 74.47

Other Bodies Corporate (excluding associated companies) and Clearing Members 1,546,982 3.54

Individuals and Trusts 9,004,862 20.60

Shares transferred to IEPF Authority 112,846 0.26

Unclaimed Suspense Account 51,030 0.12

Total 43,693,333 100.00

Graphic Presentation of the Equity Shareholding Pattern as on 31.03.2018

Promoters, Directors & their Relativesand associated companies

74.47%

Banks & Mutual Funds

0.19%

FinancialInstitutions/Insurance Companies

0.01%

Fll/Foreign Nationals &NRIs/OCB

0.81%

Unclaimed Suspense Account

0.12%

Individuals and Trusts

20.60%

Other Bodies Corporate (excludingassociated companies) and

Clearing Members

3.54%

Shares Transferred to IEPF Authority

0.26%

12.stTop Ten Shareholders of the Company as on 31 March 2018

Sl. No Name of Shareholders No. of shares % of shareholding

1. Vardhan Limited 26,190,872 59.94

2. R V Investment & Dealers Limited 3,210,120 7.35

3. Kir�vardhan Finvest Services Limited 1,154,907 2.64

4. Saumya Vardhan Kanoria 556,440 1.27

5. Madhuvan� Kanoria 498,321 1.14

6. Rajya Vardhan Kanoria 461,481 1.06

7. Anand Vardhan Kanoria 434,739 0.99

8. Chartered Finance & Leasing Limited 350,000 0.80

9. Sanjeev Bubna 169,757 0.39

10. Monet Securi�es Private Limited 154,758 0.36

Total 33,181,395 75.94

13. Outstanding GDR/ADRs/Warrants or any conver�ble Instruments, conversion date and likely impact on equity.

The Company has not issued GDRs/ ADRs/ Warrants or any other conver�ble Instruments.

14. Commodity Price Risk/Foreign Exchange Risk and Hedging Ac�vi�es Prices and demand for the Company's products are strongly influenced by Global Demand and Prices. Vola�lity in commodity prices and demand may have effect on our earnings.

We consider exposure to commodity price fluctua�on to be an integral part of our business. Our usual policy is to buy and sell our products at prevailing market prices and not to enter price hedging arrangements.

The Company has foreign currency exposure in both assets and liabili�es. The foreign exchange risk arising from these exposures are managed with appropriate hedging ac�vi�es. The Company uses forward exchange contracts to hedge against its foreign currency exposure a�er taking into considera�on the natural hedge available in USD-INR terms. The Company does not enter into any deriva�ve instruments for trading or specula�ve purposes. The details of foreign currency exposure as on 31st March, 2018 are disclosed in Note No. 39 to the Standalone Financial Statements.





15. Plant Loca�ons i. Alcochem Ankleshwar Division Ankleshwar Chemical Works 3407, GIDC Industrial Estate, P.O. Ankleshwar-393 002, Dist. Bharuch (Gujarat).

Bio-Compost Plant Vill. Sengpur, Taluka: Ankleshwar-393 002, Dist. Bharuch (Gujarat).

ii. Alcochem Vizag Division Plot No.32, Jawaharlal Nehru Pharma City, Parwada, Vishakhapatnam – 531 021, Andhra Pradesh

iii. Solar Power Plant Vill. Bawdi Barsinga, P.O. Bap, Tehsil: Phalodi, Dist. Jodhpur (Rajasthan)

16. Address for Correspondence:

For Investors' ma�ers

For queries rela�ng to Financial Statements

Company SecretaryKanoria Chemicals & Industries Limited'Park Plaza', 71 Park Street,Kolkata-700 016.Phone : (033) 4031 3200 Fax : (033) 4031 3220 Email : [email protected]: h�p://www.kanoriachem.com

Group Chief Financial OfficerKanoria Chemicals & Industries Limited'Park Plaza', 71 Park Street,Kolkata-700 016.Phone : (033) 4031 3200 Fax : (033) 4031 3220 Email : [email protected]: h�p://www.kanoriachem.com

17. Deposit of unclaimed dividend amount to Investor Educa�on and Protec�on Fund

During the year under review, the Company has deposited unclaimed dividend of Rs. 383,565/- for the year 2009-10 to the Investor Educa�on and Protec�on Fund on 13th September 2017, pursuant to Sec�on 125 of the Companies Act, 2013 read with allied rules.


R.V. Kanoria


DIN:00003792

Registered Office

'Park Plaza'

71, Park Street


(Regulation 34, read with Schedule V (D) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)

This is to conrm that the Company has adopted a Code of Conduct for its Directors and Senior Management Personnel (“Code”) and that the same is available on

the website of the Company, www.kanoriachem.com

I hereby declare that all the Board Members and Senior Management Personnel have afrmed their compliance with the aforesaid Code for the Financial Year

ended 31st March 2018.

Declaration Affirming Compliancewith the Code of Conduct


R.V. Kanoria


DIN:00003792

Registered Office

'Park Plaza'

71, Park Street






To the Members of


1. We, M/s Jitendra K Agarwal & Associates, Chartered Accountants, the Statutory Auditors of Kanoria Chemicals & Industries Limited (“the Company”), have

examined the compliance of conditions of Corporate Governance for the year ended on March 31, 2018, as stipulated in Regulations 17 to 27 and clauses

(b) to (i) of Regulation 46(2) and para C and D of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

(“the Listing Regulations”).

Managements' Responsibility

2. The preparation of the Corporate Governance Report is the responsibility of the Management of the Company including the preparation and maintenance of

all relevant supporting records and documents. This responsibility also includes the design, implementation and maintenance of internal control relevant to

the preparation and presentation of the Corporate Governance Report.

Auditor's Responsibility

3. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for ensuring compliance with the conditions

of the Corporate Governance. It is neither an audit nor an expression of opinion on the nancial statements of the Company.

4. We have examined the books of account and other relevant records and documents maintained by the Company for the purposes of providing reasonable

assurance on the compliance with Corporate Governance requirements by the Company.

5. We have carried out an examination of the relevant records of the Company in accordance with the Guidance Note on Certication of Corporate Governance

issued by the Institute of the Chartered Accountants of India (the “ICAI”), the Standards on Auditing specied under Section 143(10) of the Companies Act

2013, in so far as applicable for the purpose of this certicate and as per the Guidance Note on Reports or Certicates for Special Purposes issued by the

ICAI which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI.

6. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and

Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.

Opinion

7. Based on our examination of the relevant records and according to the information and explanations provided to us and the representations provided by the

Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Regulations 17 to 27 and clauses (b)

to (i) of Regulation 46(2) and para C and D of Schedule V to the Listing Regulations during the year ended March 31, 2018.

8. We state that such compliance is neither an assurance as to the future viability of the Company nor the efciency or effectiveness with which the

Management has conducted the affairs of the Company.

Independent Auditor's Certificate onCorporate Governance

For Jitendra K Agarwal & Associates

Chartered Accountants

(Firm Registration No. 318086E)

(Abhishek Mohta)

Partner

Membership No. 066653

Place: New DelhithDated: 18 day of May, 2018

(Regulation 34, read with Schedule V (D) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)

To the Members of

KANORIA CHEMICALS & INDUSTRIES LIMITED

REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS

We have audited the accompanying standalone Ind AS nancial statements of M/s KANORIA CHEMICALS & INDUSTRIES LIMITED (“the Company”), which

comprises the Balance Sheet as at March 31, 2018, the Statement of Prot & Loss (including Other Comprehensive Income), the Cash Flow Statement and the

Statement of Changes in Equity for the year then ended, and a summary of signicant accounting policies and other explanatory information.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation

of these standalone Ind AS nancial statements that give a true and fair view of the nancial position, nancial performance including other comprehensive

income, cash ows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian

Accounting Standards (Ind AS) specied in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the

Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and

estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal nancial controls, that were operating effectively

for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS nancial

statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on these standalone Ind AS nancial statements based on our audit. We have taken into account the provisions of the

Act and the rules made thereunder, including the accounting and auditing standards and matters which are required to be included in the audit report under the

provisions of the Act and the Rules made thereunder.

We conducted our audit of the Standalone Ind AS nancial statements in accordance with the Standards on Auditing specied under section 143 (10) of the Act

and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that

we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS nancial statements

are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS nancial statements. The

procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the nancial statements, whether due

to fraud or error. In making those risk assessments, the auditor considers internal nancial control relevant to the Company's preparation of the Standalone Ind

AS nancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes

evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as

evaluating the overall presentation of the Standalone Ind AS nancial statements.

We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS nancial

statements.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS nancial statements give the

information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of

the state of affairs of the Company as at 31 March 2018 and its prot (including other comprehensive income), its cash ows and the changes in equity for the

year ended on that date.

Independent Auditor's Report





(Abhishek Mohta)

Partner





Place: New DelhithDated: 18 May, 2018

OTHER MATTER

The Comparative nancial information of the Company for the year ended March 31, 2017 are based on the previously issued statutory nancial statement

prepared in accordance with Ind AS included in these nancial statements have been audited by the predecessor auditor whose report for the year then ended

expressed an unmodied opinion on those nancial statements. Our Opinion is not modied in the respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section

143 of the Act, we give in the Annexure 'A' a statement on the matters specied in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. The Balance Sheet, the Statement of Prot & Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in

Equity dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid standalone Ind AS nancial statements comply with the Indian Accounting Standards specied under section 133 of the Act;

e. On the basis of the written representations received from the directors as on March 31, 2018, taken on record by the Board of Directors, none of the directors

is disqualied as on March 31, 2018, from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the adequacy of the internal nancial with reference to nancial statement of the Company and the operating effectiveness of such controls,

refer to our separate report in Annexure 'B'. Our report expresses an unmodied opinion on the adequacy and operating effectiveness of the Company's

internal nancial controls with reference to the nancial statements.

g. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our

opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigation as on March 31, 2018 on its nancial position in its Standalone Ind AS nancial statement

– Refer Note no. 30 to the Standalone Ind AS nancial statements;

ii. The Company did not have any material foreseeable losses on long-term contracts including derivative contracts;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company, except, for

Rs. 0.67 million which is held in abeyance due to pending legal cases.


Annexure Ato the Independent Auditor's Report

The annexure referred to in paragraph 1 under the heading “Report on Other Legal and Regulatory Requirements” of our report of even date in respect

to statutory audit of KANORIA CHEMICALS & INDUSTRIES LIMITED for the year ended March 31, 2018, we report that:

1. (a) The Company has maintained proper records to show full particulars including quantitative details and situation of the xed assets.

(b) The management has physically veried the xed assets of the Company in a phased manner to cover the entire block of assets once in a year and no

material discrepancies were noticed.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of

immovable properties are held in the name of the Company.

2. The inventories have been physically veried during the year by the management. In our opinion, the frequency of verication is reasonable. The

discrepancies noticed on verication between the physical stock and the book stock, wherever ascertained were not signicant.

3. The Company has not granted loans, secured or unsecured, to companies, rms or other parties covered in the register maintained under section 189 of the

Act. Accordingly, the requirements of clauses (iii) (a), (b) & (c) of the paragraph 3 of the Order are not applicable.

4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act,

with respect to the loans & investments made and the guarantees provided.

5. In our opinion and according to the information and explanations given to us, the Company did not receive any deposits covered under section 73 to 76 of the

Act and the rules framed there under.

6. The Central Government has prescribed maintenance of cost records under section 148(1) of the Act, for the Company. We have broadly reviewed such

accounts and records and are of the opinion that prima facie, the prescribed accounts & records have been made & maintained but no detailed examination

of such records and accounts have been carried out by us.

7. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has generally been

regular in depositing the undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, service tax, duty of

customs, duty of excise, value added tax, cess and any other statutory dues during the year with the appropriate authorities. According to the

information and explanations given to us, no undisputed dues as above were outstanding as at March 31, 2018 for a period of more than six months

from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income tax, sales tax,

service tax, duty of customs, duty of excise, value added tax and cess as at March 31, 2018 which have not been deposited on account of dispute

except for the following:

Name of the statute Nature of Dues Amount(Rs. in millions)

Period to which it relates

Forum where dispute is pending

The Central Excise Act, 1944 Excise Duty 2.10 Feb-12 to May-16 Commissioner (A) – Central Excise, Surat

Excise Duty 3.82 Apr-10 to Feb-16 Commissioner (A) – Central Excise, Visakhapatnam

The Service Tax under the Finance Act, 1994

Service Tax 0.75 Apr-12 to Dec-15 CESTAT - Ahmedabad

The Indian Stamp Act, 1899 Stamp Duty 4.56 2011-12 Rajasthan High Court




8. According to the records of the Company examined by us and the information and explanations provided to us, the Company has not defaulted in repayment

of loans or borrowings to any Financial Institutions or Banks or dues to debenture holders. Further as at the Balance sheet date the Company does not have

any loans or borrowing from the Government.

9. According to the information and explanation given to us and based on our overall examination of the books of accounts, we report that the company has not

availed any term loan facility during the year. Furthermore, the company has neither raised moneys through initial public offer nor through further public offer

during the year.

10. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in

India, and according to the information and explanations given to us, we have neither come across any instance of fraud by the Company or any fraud on the

company by its ofcers or employees, noticed or reported during the year, nor have we been informed of any such case by the management.

11. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/ provided for

managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

12. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is

not applicable.

13. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties

are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the nancial statements as

required by the applicable accounting standards.

14. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any

preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly paragraph 3(xiv) of the Order is not

applicable to the Company.

15. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into

non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not

applicable to the Company.

(Abhishek Mohta)

Partner








Annexure Bto the Independent Auditor's Report

The Annexure referred to in paragraph 2 (f) under the heading “Report on Other Legal and Regulatory Requirements” of our Independent Auditor's

Report of even date, in respect to the internal financial control under clause (i) of sub-section 3 of section 143 of the Act, of KANORIA CHEMICALS &

INDUSTRIES LIMITED for the year ended March 31, 2018, we report that:

We have audited the internal nancial controls over nancial reporting of KANORIA CHEMICALS & INDUSTRIES LIMITED (“the Company”) as of March 31, 2018

in conjunction with our audit of the nancial statements of the Company for the year ended on that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management is responsible for establishing and maintaining internal nancial controls based on the internal control over nancial reporting

criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial

Controls over Financial Reporting issued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilities include the design, implementation

and maintenance of adequate internal nancial controls that were operating effectively for ensuring the orderly and efcient conduct of its business, including

adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the

accounting records, and the timely preparation of reliable nancial information, as required under the Act.


Our responsibility is to express an opinion on the Company's internal nancial controls over nancial reporting based on our audit. We conducted our audit in

accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing,

issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013 to the extent applicable to an audit of internal nancial controls,

both applicable to an audit of Internal Financial Controls and, both issued by ICAI. Those Standards and the Guidance Note require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal nancial controls over nancial reporting was

established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal nancial controls system over nancial reporting and

their operating effectiveness. Our audit of internal nancial controls over nancial reporting included obtaining an understanding of internal nancial controls

over nancial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal

control based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement

of the nancial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion on the Company's internal nancial

controls system over nancial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company's internal nancial control over nancial reporting is a process designed to provide reasonable assurance regarding the reliability of nancial

reporting and the preparation of nancial statements for external purposes in accordance with generally accepted accounting principles. A company's internal

nancial control over nancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,

accurately and fairly reect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded

as necessary to permit preparation of nancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of

the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance

regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the

nancial statements.



INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal nancial controls over nancial reporting, including the possibility of collusion or improper management

override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal nancial

controls over nancial reporting to future periods are subject to the risk that the internal nancial control over nancial reporting may become inadequate

because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion, the Company has, in all material respects, an adequate internal nancial controls system over nancial reporting and such internal nancial

controls over nancial reporting were operating effectively as at March 31, 2018, based on the internal control over nancial reporting criteria established by

the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial

Reporting issued by ICAI.

Annexure Bto the Independent Auditor's Report

(Abhishek Mohta)

Partner









Balance SheetstAs at 31 March 2018

Place: New Delhi th Date: 18 May, 2018

ABHISHEK MOHTA

N. K. NOLKHA N. K. SETHIA Group Chief Financial Ofcer Company Secretary

AMITAV KOTHARIDirector

(DIN:01097705)

R. V. KANORIA Managing Director

(DIN:00003792)PartnerMembership No. 066653

The accompanying notes are an integral part of the Financial Statements

As per our report of even date annexed

For JITENDRA K AGARWAL & ASSOCIATES For and on behalf of the Board,

Chartered AccountantsFirm Registration No. 318086E

(Rs. in million)

Total Non-Current Assets

Current Assets

stAs at 31 March 2017

3,615.43

265.15

4.35

1,807.71

692.76

16.55 38.32 6,440.27

322.56

30.82

551.91

5.88

375.49

44.06

74.27

195.30

234.03

1,834.32

8,274.59

218.49

5,925.15

6,143.64

289.36

14.85

57.66

503.15

865.02

722.51

253.68

255.18

8.45

26.11

1,265.93

2,130.95

8,274.59


4,025.47

67.91

9.98

1,453.85

803.05

13.25

3.29

6,376.80

419.11

-

529.31

21.32

352.53

95.04

41.85

195.11

233.39

1,887.66

8,264.46

218.49

5,878.43

6,096.92

196.88

10.04

63.98

505.00

775.90

683.48

473.09 199.01 7.99 28.07 1,391.64 2,167.54 8,264.46




Statement of Profit and LossstFor the year ended 31 March 2018




Chartered AccountantsFirm Registration No.318086E


ABHISHEK MOHTA



(DIN:01097705)



Par�culars

INCOME

Revenue from Opera�ons 22 3,468.14 3,273.71

Other Income 23 233.08 226.70

Total Income 3,701.22 3,500.41

EXPENSES

Cost of Materials Consumed 2,393.13 1,904.11

Purchase of Stock-in-Trade 12.06 29.42

Change in Inventories of Finished Goods and Work-in-Progress 16.41 (56.46)

Excise Duty on Sale of Goods 80.66 317.07

Employee Benefit Expenses 24 230.63 205.85

Finance Costs 25 70.58 32.67

Deprecia�on and Amor�sa�on Expenses 5A, 5B 211.88 204.32

Other Expenses 26 603.46 588.27

Total Expenses 3,618.81 3,225.25

Profit before Excep�onal Items and Tax 82.41 275.16

Excep�onal Item 27 - 184.17


Tax Expenses:

Current Tax 21.17 14.99

MAT Credit En�tlement (21.17) (14.99)

MAT Credit En�tlement for earlier years - (99.87)

Deferred Tax 26.41 3.66

Profit for the Year 56.00 187.20

OTHER COMPREHENSIVE INCOME (OCI)

A (i) Items that will not be reclassified to Profit or Loss 28A (0.53) (5.20)

(ii) Income-tax rela�ng to items that will not be reclassified to Profit or Loss 0.55 2.25

B (i) Items that will be reclassified to Profit or Loss 28B (26.97) 5.02

(ii) Income-tax rela�ng to items that will be reclassified to Profit or Loss 3.11 (0.58)

Other Comprehensive Income for the year, net of tax (23.84) 1.49

Total Comprehensive Income for the Year 32.16 188.69

Earning per Share (INR) - Basic & Diluted 29 1.28 4.28

Significant Accoun�ng Policies 3

Notes For the year endedst 31 March 2018

For the year endedst 31 March 2017

(Rs. in million)



Equity Share Capital 218.47 - 218.47 218.47 - 218.47

Add : Forfeited Shares (amount paid up) 0.02 - 0.02 0.02 - 0.02

Total 218.49 - 218.49 218.49 - 218.49

Statement of Changes in Equity stFor the year ended 31 March 2018

(A) Equity Share Capital

stYear ended 31 March 2018 stYear ended 31 March 2017

Balance at the beginning of the repor�ng

period

Changes during the

year

Balance at the end of

the repor�ng period

Balance at the beginning of the repor�ng

period

Changes during the

year

Balance at the end of

the repor�ng period

(B) Other Equity

Reserves and Surplus Items of Other Comprehensive Income

Total

Capital Reserve

Securi�es Premium Reserve

Capital Redemp�on

Reserve

Retained Earnings

Equity Instruments

Debt Instruments

stAs at 31 March 2016 34.17 161.50 72.69 5,524.41 3.15 19.42 5,815.34


Other Comprehensive Income (4.26) 1.31 4.44 1.49

Total Comprehensive Income 34.17 161.50 72.69 5,707.35 4.46 23.86 6,004.03

Dividend (65.54) (65.54)

Dividend Distribu�on Tax (13.34) (13.34)

stAs at 31 March 2017 34.17 161.50 72.69 5628.47 4.46 23.86 5,925.15


Other Comprehensive Income (0.86) 0.88 (23.86) (23.84)

Total Comprehensive Income 34.17 161.50 72.69 5,683.61 5.34 - 5,957.31

Dividend (65.54) (65.54)

Dividend Distribu�on Tax (13.34) (13.34)

stAs at 31 March 2018 34.17 161.50 72.69 5,604.73 5.34 - 5,878.43




Chartered AccountantsFirm Registration No. 318086E


ABHISHEK MOHTA



(DIN:01097705)



(Rs. in million)



Statement of Cash FlowstFor the year ended 31 March 2018

For the year endedst31 March 2018


A. CASH FLOW FROM OPERATING ACTIVITIES


Adjustments for:

Excep�onal item - 184.17

Unrealized Debts and Claims wri�en off 0.41 1.55

Provision for bad & doub�ul Debts & Advances (net) 0.74 -

Fair Value Loss on Foreign exchange forward contracts 1.24 10.20


Deprecia�on & Amor�sa�on 211.88 204.32

(Profit)/Loss on Sale of Fixed Assets (Net) (2.78) 0.84

(Profit)/Loss on Sale of Investments as FVTPL/FVTCOI (Net) (42.72) (21.50)

Interest Income (91.27) (92.16)

Fair value gain on Financial Instruments as FVTPL (Net) (14.83) (58.26)

Dividend Income (4.92) (9.77)

Guarantee fee Income (16.72) (16.72)

Liabili�es Wri�en back (6.34) (2.98)

Opera�ng Profit before Working Capital changes 187.68 323.35

Adjustments for:

(Increase)/ Decrease in Trade and other Receivables (Net) 23.28 (237.19)

Inventories (96.54) (52.31)

Increase/ (Decrease) in Trade and other Payables (Net) 192.44 70.41

Cash generated from Opera�ons 306.86 104.26

Income Tax (Paid)/Refund (net) (20.70) (46.64)

Net Cash from Opera�ng ac�vi�es 286.16 57.62

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (382.20) (322.91)

Sale of Fixed Assets 6.06 15.40

Loans & Advances to Subsidiaries (Net) (160.89) (174.47)

Purchase of Investments (1,509.00) (1,566.05)

Sale of Investments 1,925.03 2,047.29

Fixed Deposits (Net) 23.27 0.21

Interest received 125.60 44.01

Guarantee fee received 19.13 17.56

Dividend received 0.10 9.77

Net Cash used in /from Inves�ng Ac�vi�es 47.10 70.81

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds/Payments of Borrowings (Net) (156.12) (46.73)

Dividend Paid (including Dividend Distribu�on Tax) (78.88) (78.88)

Finance Costs paid (82.82) (44.58)

Net Cash used in Financing ac�vi�es (317.82) (170.19)

Net Increase/(Decrease) in Cash and Cash equivalents 15.44 (41.76)

Cash and Cash equivalents at the beginning of the year 5.88 47.64

Cash and Cash equivalents at the end of the year (Note 12A) 21.32 5.88

Note:a. The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Indian Accounting Standard (Ind AS 7) - Statement of Cash Flow.b. The composition of Cash and Cash Equivalents have been determined based on the Accounting Policy No. 3(M).





ABHISHEK MOHTA



(DIN:01097705)



(Rs. in million)



Notes to the Financial Statements

1. Corporate Information

Kanoria Chemicals & Industries Limited (the Company) having its registered ofce at ‘Park Plaza’, 71 Park Street, Kolkata – 700 016, India is a Public

Limited Company incorporated and domiciled in India. The Equity Shares of the Company are listed on National Stock Exchange of India Ltd. and BSE Ltd.

The Company is primarily engaged in manufacture of Industrial Chemicals in India.

2. Basis of Preparation

A. Statement of Compliance

These nancial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting

Standards) Rules, 2015 (as amended) notied under Section 133 of Companies Act, 2013 (the Act) and other relevant provisions of the Act.

These nancial statements have been approved for issue by the Board of Directors on 18th May 2018.

B. Functional and Presentation Currency

These nancial statements are presented in Indian Rupees (INR), which is also the Company’s functional currency. All amounts have been rounded

off to the nearest two decimals of millions, unless otherwise indicated.

C. Historical Cost Convention

The nancial statements have been prepared following accrual basis of accounting on a historical cost basis, except for the following which are

measured at fair value:

i. Certain nancial assets and liabilities

ii. Property, plant & equipment

iii. Dened benet plans

D. Fair Value Measurement

A number of Company’s accounting policies and disclosures require fair value measurement for both nancial and non-nancial assets

and liabilities.

All assets and liabilities for which fair value is measured or disclosed in the nancial statements are categorised within the fair value hierarchy,

based on the lowest level input that is signicant to the fair value measurement, as under:

i. Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

ii. Level 2 — Valuation techniques for which the lowest level input that is signicant to the fair value measurement isdirectly or indirectly observable

iii. Level 3 — Valuation techniques for which the lowest level input that is signicant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the nancial statements on a recurring basis, the Company determines whether transfers have

occurred between levels in the hierarchy by re-assessing categorisation, based on the lowest level input that is signicant to the fair value

measurement, at the end of each reporting period.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufcient data are available to measure fair value,

maximising the use of relevant observable inputs and minimising the use of unobservable inputs. External valuers are involved for valuation of

signicant assets and liabilities. Involvement of external valuers is decided upon annually by the Management. Selection criteria include market

knowledge, reputation, independence and whether professional standards are maintained. The Management decides, after discussions with the

Company’s external valuers, which valuation techniques and inputs to use for each case.

At each reporting date, the Management analyses the movements in the values of assets and liabilities which are required to be re-measured or re-

assessed as per the Company's accounting policies.



For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics

and risks of the asset or liability and the level of the fair value hierarchy as explained above.

E. Current versus Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/non-current classication.

An asset or liability is treated as current if it satises any of the following condition:

i. the asset/liability is expected to be realised/settled in normal operating cycle;

ii. the asset is intended for sale or consumption;

iii. the asset/liability is held primarily for the purpose of trading;

iv. the asset/liability is expected to be realised/settled within twelve months after the reporting period;

v. the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the

reporting period;

vi. in the case of a liability, the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the

reporting period

All other assets and liabilities are classied as non-current.

Deferred tax assets and liabilities are classied as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company

has identied twelve months as its operating cycle.

F. Use of Estimates and Judgements

In preparing these nancial statements, management has made judgements, estimates and assumptions that affect the application of accounting

policies and the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures including contingent liabilities.

Actual results may differ from these estimates. Difference between actual results and estimates are recognised in the period prospectively in which

the results are known/materialised.

Estimates and underlying assumptions are reviewed on an ongoing basis and are based on historical experience and other factors, including

expectation of future events that may have a nancial impact on the Company and that are believed to be reasonable under the circumstances.

Detailed information about estimates and judgements is included in Note 4.

3. Signicant Accounting Policies

A. Foreign Currency Transactions

Foreign currency transactions are translated into the functional currency at the exchange rates on the date the transaction rst qualies for

recognition.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting

date. Exchange difference arising on settlement or translation of monetary items are recognised in the Statement of Prot and Loss on net basis.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the

initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the

fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of

the gain or loss on the change in fair value of the item i.e., translation differences on items whose fair value gain or loss is recognised in OCI or

Statement of Prot and Loss are also recognised in OCI or Statement of Prot and Loss, respectively.




B. Property, Plant & Equipment

i. Recognition & Measurement

All items of property, plant and equipment (PPE) are stated at cost less accumulated depreciation and accumulated impairment loss, if any.

Cost of an item of PPE includes its purchase cost, non refundable taxes and duties, directly attributable cost of bringing the item to its working

condition for its intended use and borrowing cost if the recognition criteria is met.

In case of self-constructed assets, cost includes the costs of all materials used in construction, direct labour, allocation of directly attributable

overheads, directly attributable borrowing costs incurred in bringing the item to working condition for its intended use. The costs of testing

whether the asset is functioning properly, after deducting the net proceeds from selling items produced while bringing the asset to that location

and condition, are also added to the cost of self-constructed assets. The Company considers a Project to be 'unit of measure' for construction

of a manufacturing plant rather than individual assets comprising the project in appropriate cases for the purpose of capitalisation of

expenditure incurred during construction period.

If signicant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate component

of property, plant and equipment.

Subsequent costs are included in an item of PPE‘s carrying value or recognised as a separate item, as appropriate, only when it is probable

that future economic benets associated with the item will ow to the Company and the cost of the item can be measured reliably. All other

repairs and maintenance are charged to the Statement of Prot and Loss during the reporting period in which they are incurred.

Major Inspection/ Repairs/ Overhauling expenses are recognized in the carrying amount of the item of property, plant and equipment as a

replacement if the recognition criteria are satised. Any Unamortized part of the previously recognized expenses of similar nature is

derecognized.

Capital work-in-progress is stated at cost which includes expenses incurred during construction period, interest on amount borrowed for

acquisition of qualifying assets and other expenses incurred in connection with project implementation in so far as such expenses relate to the

period prior to the commencement of commercial production.

An item of PPE or any signicant part thereof is derecognised upon disposal or when no future economic benets are expected from its use. Any

gain or loss on derecognition of an item of PPE is recognised in Statement of Prot and Loss.

ii. Depreciation methods, estimated useful lives and residual value

Depreciation on all items of PPE is calculated using the straight line method to allocate their cost, net of their residual value, over their

estimated useful lives as prescribed in Schedule II to the Act except for following items where useful life is considered as lower than that

prescribed based on technical assessment:

PPE/PPE Group Useful life

Efuent treatment plant Digester 15 years

Measuring instruments like ow meters, transmitters, level gauges etc. 10 years

Other Independent Instruments 15 years

Depreciation on an item of PPE purchased/sold during the year is provided on pro-rata basis.

Freehold land is not depreciated.

The residual values are not more than 5% of the cost of an item of PPE.

Depreciation methods, useful lives and residual values are reviewed at the end of each nancial year and adjusted

prospectively, if appropriate.

C. Intangible Assets

Intangible assets are initially measured at cost. Such intangible assets are subsequently measured at cost less accumulated amortisation and

accumulated impairment losses, if any.




The Company amortises intangible assets with a nite useful life using the straight line method over three years.

Amortisation methods and useful lives are reviewed at the end of each nancial year and adjusted prospectively, if appropriate.

D. Leases

Leases are classied as nance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

All other leases are classied as operating leases.

In respect of assets taken on operating lease, lease rentals are recognized as an expense in the Statement of Prot and Loss on straight line basis

over the lease term unless

i. another systematic basis is more representative of the time pattern in which the benet is derived from the leased asset; or

ii. the payments to the lessor are structured to increase in the line with expected general ination to compensate for the lessor’s expected

inationary cost increases

Finance Leases, which effectively transfer to the lessee substantially all the risks and benets incidental to ownership of the leased item, are

capitalized. Lease management fees, legal charges and other initial direct costs are capitalized.

If there is no reasonable certainty that the Company will obtain the ownership by the end of lease term, capitalized leased assets are depreciated

over the shorter of the estimated useful life of the asset or the lease term.

Leasehold land with perpetual right has been included in property plant & equipment.

E. Financial Instruments

A nancial instrument is any contract that gives rise to a nancial asset of one entity and a nancial liability or equity instrument of another entity.

I. Financial Assets

Initial recognition and measurement:

The Company recognizes a nancial asset in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All nancial

assets are recognized initially at fair value, plus in the case of nancial assets not recorded at fair value through prot or loss (FVTPL), transaction

costs that are attributable to the acquisition of the nancial asset.

Where the fair value of a nancial asset at initial recognition is different from its transaction price, the difference between the fair value and the

transaction price is recognized as a gain or loss in the Statement of Prot and Loss at initial recognition if the fair value is determined through a

quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from observable

markets (i.e. level 2 input).

In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction

price is deferred appropriately and recognized as a gain or loss in the Statement of Prot and Loss only to the extent that such gain or loss arises due

to a change in factor that market participants take into account when pricing the nancial asset.

However, trade receivables that do not contain a signicant nancing component are measured at transaction price.

Subsequent measurement:

For subsequent measurement, the Company classies a nancial asset in accordance with the below criteria:

a. The Company’s business model for managing the nancial asset and

b. The contractual cash ow characteristics of the nancial asset.

Based on the above criteria, the Company classies its nancial assets into the following categories:

i. Financial assets measured at amortized cost

ii. Financial assets measured at fair value through other comprehensive income (FVTOCI)

iii. Financial assets measured at fair value through prot or loss (FVTPL)




i. Financial assets measured at amortized cost:

A nancial asset is measured at the amortized cost if both the following conditions are met:

a) The Company’s business model objective for managing the nancial asset is to hold nancial assets in order to collect contractual

cash ows, and

b) The contractual terms of the nancial asset give rise on specied dates to cash ows that are solely payments of principal and interest on the

principal amount outstanding.

This category applies to certain investment in debt instruments, cash and bank balances, trade receivables, loans and other nancial assets of the

Company (Refer Note 37 for further details). Such nancial assets are subsequently measured at amortized cost using the effective interest

method.D112

The amortized cost of a nancial asset is also adjusted for loss allowance, if any.

ii. Financial assets measured at FVTOCI:

A nancial asset is measured at FVTOCI if both of the following conditions are met:

a) The Company’s business model objective for managing the nancial asset is achieved both by collecting contractual cash ows and selling

the nancial assets, and

b) The contractual terms of the nancial asset give rise on specied dates to cash ows that are solely payments of principal and interest on the


This category applies to certain investments in debt instruments (Refer Note 37 for further details). Such nancial assets are subsequently

measured at fair value at each reporting date. Fair value changes are recognized in the Other Comprehensive Income (OCI). However, the Company

recognizes interest income and impairment losses and its reversals in the Statement of Prot and Loss.

On Derecognition of such nancial assets, cumulative gain or loss previously recognized in OCI is reclassied from equity to Statement of

Prot and Loss.

Further, the Company, through an irrevocable election at initial recognition, has measured certain investments in equity instruments at FVTOCI

(Refer Note 37 for further details). The Company has made such election on an instrument by instrument basis. These equity instruments are not

held for trading. Pursuant to such irrevocable election, subsequent changes in the fair value of such equity instruments are recognized in OCI.

However, the Company recognizes dividend income from such instruments in the Statement of Prot and Loss.

On Derecognition of such nancial assets, cumulative gain or loss previously recognized in OCI is not reclassied from the equity to Statement of

Prot and Loss. However, the Company may transfer such cumulative gain or loss into retained earnings within equity.

iii. Financial assets measured at FVTPL:

A nancial asset is measured at FVTPL unless it is measured at amortized cost or at FVTOCI as explained above. This is a residual category applied to

all other investments of the Company excluding investments in subsidiary companies (Refer Note 37 for further details). Such nancial assets are

subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Statement of Prot and Loss.

A nancial asset (or, where applicable, a part of a nancial asset or part of a group of similar nancial assets) is derecognized (i.e. removed from the

Company’s Balance Sheet) when any of the following occurs:

i. The contractual rights to cash ows from the nancial asset expires;

ii. The Company transfers its contractual rights to receive cash ows of the nancial asset and has substantially transferred all the risks and

rewards of ownership of the nancial asset;

iii. The Company retains the contractual rights to receive cash ows but assumes a contractual obligation to pay the cash ows without material

delay to one or more recipients under a ‘pass-through’ arrangement (thereby substantially transferring all the risks and rewards of ownership

of the nancial asset);

iv. The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the nancial asset.




In cases where Company has neither transferred nor retained substantially all of the risks and rewards of the nancial asset, but retains control of

the nancial asset, the Company continues to recognize such nancial asset to the extent of its continuing involvement in the nancial asset. In that

case, the Company also recognizes an associated liability. The nancial asset and the associated liability are measured on a basis that reects the

rights and obligations that the Company has retained.

On Derecognition of a nancial asset, (except as mentioned in ii above for nancial assets measured at FVTOCI), the difference between the carrying

amount and the consideration received is recognized in the Statement of Prot and Loss.

Impairment of financial assets:

The Company applies expected credit losses (ECL) model for measurement and recognition of loss allowance on the following:

i. Trade receivables

ii. Financial assets measured at amortized cost (other than trade receivables)

iii. Financial assets measured at fair value through other comprehensive income (FVTOCI)

In case of trade receivables, the Company follows a simplied approach wherein an amount equal to lifetime ECL is measured and recognized as

loss allowance.

In case of other assets (listed as ii and iii above), the Company determines if there has been a signicant increase in credit risk of the nancial asset

since initial recognition. If the credit risk of such assets has not increased signicantly, an amount equal to 12-month ECL is measured and

recognized as loss allowance. However, if credit risk has increased signicantly, an amount equal to lifetime ECL is measured and recognized as

loss allowance.

Subsequently, if the credit quality of the nancial asset improves such that there is no longer a signicant increase in credit risk since initial

recognition, the Company reverts to recognizing impairment loss allowance based on 12-month ECL.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the Statement of Prot and Loss

under the head ‘Other expenses’.

II. Financial Liabilities


The Company recognises a nancial liability in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All nancial

liabilities are recognised initially at fair value minus, in the case of nancial liabilities not recorded at fair value through prot or loss (FVTPL),

transaction costs that are attributable to the acquisition of the nancial liability.

Where the fair value of a nancial liability at initial recognition is different from its transaction price, the difference between the fair value and the

transaction price is recognised as a gain or loss in the Statement of Prot and Loss at initial recognition if the fair value is determined through a

quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from observable

markets (i.e. level 2 input).


price is deferred appropriately and recognised as a gain or loss in the Statement of Prot and Loss only to the extent that such gain or loss arises due

to a change in factor that market participants take into account when pricing the nancial liability.


All nancial liabilities of the Company are subsequently measured at amortised cost using the effective interest method.

Derecognition:

A nancial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing nancial liability is

replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modied, such an

exchange or modication is treated as the Derecognition of the original liability and the recognition of a new liability. The difference between the

carrying amount of the nancial liability derecognised and the consideration paid is recognised in the Statement of Prot and Loss.




III. Derivative Financial Instruments

Derivative nancial instruments viz. foreign exchange forward contracts, interest rate swaps and cross currency swaps to manage Company's

exposure to foreign exchange rate and interest rate risks are initially recognised at fair value at the date the derivative contracts are entered into and

are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in prot or loss

immediately. The Company does not hold derivative nancial instruments for speculative purposes.

F. Impairment Assets that have an indenite useful life are not subject to amortisation and are tested for impairment annually and whenever there is an indication

that the asset may be impaired.

Assets that are subject to depreciation and amortisation and assets representing investments in subsidiary companies are reviewed for

impairment, whenever events or changes in circumstances indicate that carrying amount may not be recoverable. Such circumstances include,

though are not limited to, signicant or sustained decline in revenues or earnings and material adverse changes in the economic environment.

An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit (CGU) exceeds its recoverable amount. The

recoverable amount of an asset is the greater of its fair value less cost to sell and value in use. To calculate value in use, the estimated future cash

ows are discounted to their present value using a pre-tax discount rate that reects current market rates and the risk specic to the asset. For an

asset that does not generate largely independent cash inows, the recoverable amount is determined for the CGU to which the asset belongs. Fair

value less cost to sell is the best estimate of the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable,

willing parties, less the cost of disposal.

Impairment losses, if any, are recognised in the Statement of Prot and Loss and included in depreciation and amortisation expense. Impairment

losses are reversed in the Statement of Prot and Loss only to the extent that the asset’s carrying amount does not exceed the carrying amount that

would have been determined if no impairment loss had previously been recognised.

G. Inventories

Inventories of raw materials, stores and spare parts, work in progress and nished goods are measured at lower of cost and net realisable value.

However, materials and other items held for use in production of inventories are not written down below cost if the nished goods in which they will

be used are expected to be sold at or above cost. In case of certain products, where cost cannot be ascertained reliably, the same are measured at

net realisable value.

Cost of raw materials, stores and spares include its purchase cost and other costs incurred in bringing them to their present location and condition.

Cost of work in progress and nished goods include direct materials, direct labour and appropriate proportion of variable and xed overheads, the

latter being allocated on the basis of normal operating capacity. Costs are assigned to individual item of inventory on weighted average method.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs

necessary to make the sale.

H. Income Tax

Income Tax comprises current and deferred tax and is recognised in Statement of Prot and Loss except to the extent that it relates to an item

recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or in equity as

the case may be.

i. Current Tax

Current tax comprises the expected tax payable on the taxable income for the year and any adjustments to the tax payable in respect of previous

years. It is measured using tax rates and tax laws enacted or substantively enacted by the reporting date.

ii. Deferred Tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for nancial reporting purposes

and the corresponding amounts used for taxation purposes i.e tax base. Deferred tax asset is also recognised in respect of carried forward tax losses

and unused tax credits.




Deferred Tax assets are recognised to the extent that it is probable that future taxable amounts will be available to utilise those temporary

differences, carried forward tax losses and unused tax credits.

Deferred Tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the tax

laws that have been enacted or substantively enacted by the reporting date.

Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay

normal income tax during the specied period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is

written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the

specied period.

The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognised amounts and

where it intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. In case of deferred tax assets and

deferred tax liabilities, the same are offset if the Company has a legally enforceable right to set off corresponding current tax assets against current

tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the Company.

I. Revenue Recognition

The Company recognises revenue when it is probable that future economic benets will ow to the Company and the amount of revenue can be

reliably measured. Revenue is measured at the fair value of the consideration received or receivable.

The following specic recognition criteria must also be met for main revenue streams of the company for its recognition :

i. Revenue from Sale of Goods

Revenue from sale of goods is recognised when the signicant risks and rewards of ownership of the goods have passed to the buyer and includes

excise duty and net of returns, trade allowances, rebates, value added taxes and amounts collected on behalf of third parties.

ii. Renewable Energy Certificates (RECs)

RECs are recognised as accrued on the basis of notication issued by Central Electricity Regulatory Commission (CERC). Revenue from RECs is

measured on the basis of actual sale price on transfer of RECs and on the basis of CERC prescribed oor price for RECs held by/accrued

to the Company.

iii. Industrial Incentives

Government grants in the nature of industrial incentives to compensate the Company for expenses are recognised when there is a reasonable

assurance that the same will be received and are included in Statement of Prot and Loss as other operating revenue.

iv. Interest Income

Interest income from debt instruments is recognised on accrual basis using effective interest rate method applicable on such debt instrument.

v. Dividend

Dividend income is recognised when the Company’s right to receive the payment is established, which is generally when the shareholders approve

the dividend.

J. Employee Benefits

i. Short-term employee benefits

Short-term employee benet obligations are measured on an undiscounted basis and expensed as the relative service is provided. A liability is

recognised for the amount expected to be paid e.g. towards bonus, if the Company has a present legal or constructive obligation to pay this amount

as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.

ii. Defined contribution plan

Provident Fund, a dened contribution plan, is a post employment benet plan under which the Company pays contributions into a separate entity

and has no legal or constructive obligation to pay further amounts. The Company recognises the contributions payable towards the provident fund as

an expense in the Statement of Prot and Loss in the periods during which the related services are rendered by employees




iii. Defined benefit plan

A dened benet plan is a post employment benet plan other than a dened contribution plan. The Company has unfunded Gratuity liability

towards this which is provided on the basis of actuarial valuation made by an external valuer at the end of each nancial year using the projected

unit credit method.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling (if any, excluding interest) are immediately recognised in

the balance sheet with corresponding debit or credit to Other Equity through OCI. Remeasurements are not classied to prot or loss in

subsequent periods.

Net interest and changes in the present value of dened benet obligation resulting from plan amendments or curtailments are recognised in prot

or loss.

iv. Other long term employee benefits

The liabilities for earned leave are measured and provided on the basis of actuarial valuation made by an external valuer at the end of each nancial

year using the projected unit credit method. Remeasurement gains or losses are recognised in Statement of Prot and Loss in the period in which

they arise.

K. Borrowing Costs

Borrowing costs consists of interest and other costs incurred in connection with the borrowing of funds. Borrowing costs attributable to the

acquisition or construction of a qualifying asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised as

part of the cost of the asset. Income earned on the temporary investment of specic borrowings pending their expenditure on qualifying assets is

deducted from the borrowings costs eligible for capitalisation. All other borrowing costs are expensed in the period in which they are incurred.

Transaction costs in respect of long-term borrowings are amortised over the tenor of respective loans using effective interest method. Borrowing

cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

L. Earnings per Share

Basic earnings per share is calculated by dividing the net prot or loss before OCI for the year attributable to equity shareholders by the weighted

average number of equity shares outstanding during the period.

Diluted earnings per share adjusts the gures used in determination of basic earnings per share to take into account the post tax effect of nance

costs associated with dilutive potential equity shares and the weighted average number of additional equity shares that would have been

outstanding assuming the issue of all dilutive potential equity shares.

M. Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and in hand and short term deposits with remaining maturity of 12 months or

less, which are subject to an insignicant risk of change in value.

N. Cash dividend to Equity shareholders

The Company recognises a liability to make distribution of cash dividend to equity shareholders of the Company when the distribution is approved by

the shareholders. A corresponding amount is recognised directly in equity.

O. Provisions

Provisions are recognised when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outow

of resources embodying economic benets will be required to settle the obligation and a reliable estimate can be made of the amount

of the obligation.

Where the effect of time value of money is material, provisions are measured at present value using a pre-tax discount rate that reects current

market assessment of the time value of money and risks specic to liability. The increase in the provision due to passage of time is recognised as

interest expense.




P. Contingent Liabilities and Assets

A contingent liability is a possible obligation that arises from past events whose existence will be conrmed by the occurrence or non-occurrence of

one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that

an outow of resources will be required to settle the obligation. The Company does not recognise a contingent liability but discloses its existence in

the nancial statements. Contingent assets are not recognised in the nancial statements.

Q. Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

R. Events after Reporting date

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such

events is adjusted within the nancial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.

S. Recent applicable Accounting pronouncements

Amendment to Ind AS issued but not yet effective

In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2018, notifying Ind AS

115, ‘Revenue from Contracts with Customers’. The amendment is applicable to the Company for the reporting period beginning April 1, 2018.

Ind AS 115 replaces existing revenue recognition standards Ind AS 11, Construction Contracts and Ind AS 18, Revenue and revised guidance note of

the ICAI on Accounting for Real Estate Transaction for Ind AS entities issued in 2016. The Company is evaluating the requirements of the amendment

and the effect on the nancial statements is being evaluated.

4. Signicant Accounting Judgements, Estimates and Assumptions

The preparation of the nancial statements requires management to make judgements, estimates and assumptions that affect the reported

amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty

about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities

affected in future periods

i. Judgements

In the process of applying the accounting policies, management has made the following judgements, which have the most signicant effect on the

amounts recognised in the nancial statements:

(a) Equity Investments measured at FVTOCI

The company has exercised the option to measure investment in equity instruments, not held for trading at FVTOCI in accordance with Ind AS

109. It has exercised this irrevocable option for its class of quoted equity shares. The option renders the equity instruments elected to be

measured at FVTOCI non recyclable to PL.

(b) Business Model for Investment of Debt Instruments

For the purpose of measuring investments in debt instruments in accordance with Ind AS 109, the company has evaluated and determined

that the business model for investments in quoted debentures and bonds is to collect the contractual cash ows and sell the nancial asset .

Such nancial assets have been accordingly classied and measured at FVTOCI.

For the purpose of measuring investments in debt instruments in accordance with Ind AS 109, the company has evaluated and determined

that the business model for investments in unquoted debentures and bonds is only to collect the contractual cash ows . Such nancial assets

have been accordingly classied and measured at amortised cost.




ii. Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a signicant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next nancial year, are described below. The Company based its assumptions and estimates on parameters available when the nancial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reected in the assumptions when they occur.

(a) Defined Benefit Plans

"The cost of the dened benet gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a dened benet obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. "

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benet obligation.

(b) Fair Value measurement of Financial Instruments

When the fair values of nancial assets and nancial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of nancial instruments.

(c) Depreciation/Amortisation and Useful Lives of Property, Plant and Equipment/Intangible Assets

Property, plant and equipment / intangible assets are depreciated / amortised over their estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company’s historical experience with similar assets and take into account anticipated technological changes. The depreciation / amortisation for future periods is revised if there are signicant changes from previous estimates.

(d) Impairment of Financial Assets

The Company reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication of impairment. If recoverable amount is less than its carrying amount, the impairment loss is accounted for.

(e) Impairment of Non-Financial Assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or Cash Generating Units (CGU’s) fair value less costs of disposal and its value in use. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

Determination of the recoverable amount involves management estimates on highly uncertain matters, such as commodity prices and their impact on markets and prices for upgraded products, development in demand, ination, operating expenses and tax and legal systems. The Company uses internal business plans, quoted market prices and the Company’s best estimate of commodity prices, currency rates, discount rates and other relevant information. A detailed forecast is developed for a period of three to ve years with projections thereafter. The Company does not include a general growth factor to volumes or cash ows for the purpose of impairment tests, however, cash ows are generally increased by expected ination and market recovery towards previously observed volumes is considered.

(f) Taxes

The Company calculates income tax expense based on reported income. Deferred income tax expense is calculated based on the differences between the carrying value of assets and liabilities for nancial reporting purposes and their respective tax basis that are considered temporary in nature. Valuation of deferred tax assets is dependent on management's assessment of future recoverability of the deferred benet. Expected recoverability may result from expected taxable income in the future, planned transactions or planned tax optimizing measures. Economic conditions may change and lead to a different conclusion regarding recoverability.




5A. Property Plant and Equipment Gross Carrying Value Depreciation Net Carrying

Value

As at 01.04.17

Additions Sale/Disposal

As at 31.03.18

As at 01.04.17

For the Year

Sale/ Disposal

As at 31.03.18

As at 31.03.18

Land & Site Development :

Freehold

Leasehold

701.00

797.80

—

—

—

—

701.00

797.80

—

22.40

—

11.21

—

—

—

33.61

701.00

764.19

Buildings 701.19 70.96 — 772.15 62.85 31.75 — 94.60 677.55

Plant & Equipment 1,720.39 540.87 2.41 2,258.85 281.98 151.73 0.16 433.55 1,825.30

Furniture & Fixtures 54.65 1.91 0.57 55.99 17.92 8.03 0.33 25.62 30.37

Vehicles & Fork Lifts 20.12 5.18 1.20 24.10 3.38 2.74 0.45 5.67 18.43

Office Equipment 14.05 2.60 0.17 16.48 5.24 2.74 0.13 7.85 8.63

Total 4,009.20 621.52 4.35 4,626.37 393.77 208.20 1.07 600.90 4,025.47

Gross Carrying Value Depreciation Net CarryingValue

As at 01.04.16


As at 31.03.17

As at 01.04.16

For the Year

Sale/ Disposal

As at 31.03.17

As at 31.03.17


Freehold

Leasehold

701.00

797.80

—

—

—

—

701.00

797.80

—

11.18

—

11.22

—

—

—

22.40

701.00

775.40

Buildings 676.70 26.10 1.61 701.19 31.19 31.88 0.22 62.85 638.34

Plant & Equipment 1,606.32 140.74 26.67 1,720.39 151.73 144.38 14.13 281.98 1,438.41

Furniture & Fixtures 51.17 4.10 0.62 54.65 7.83 10.14 0.05 17.92 36.73

Vehicles & Fork Lifts 10.92 11.82 2.62 20.12 2.12 2.22 0.96 3.38 16.74

Office Equipment 8.35 5.82 0.12 14.05 2.71 2.57 0.04 5.24 8.81

Total 3,852.26 188.58 31.64 4,009.20 206.76 202.41 15.40 393.77 3,615.43

(Rs. in million)


5B : Intangible Assets Gross Carrying Value Amortisation Net Carrying

Value

As at 01.04.17


As at 31.03.18

As at 01.04.17

For the Year

Sale/ Disposal

As at 31.03.18

As at 31.03.18

Computer Software 6.77 9.31 — 16.08 2.42 3.68 — 6.10 9.98

Gross Carrying Value Depreciation/Amortisation Net CarryingValue

As at 01.04.16


As at 31.03.17

As at 01.04.16

For the Year

Sale/ Disposal

As at 31.03.17

As at 31.03.17

Computer Software 4.89 1.88 — 6.77 0.51 1.91 — 2.42 4.35




6 : Investments(Rs. in million)

Face ValueRs.

Face ValueRs.

Nos. Nos.Amount Amount

st31 March 2018 st31 March 2017

Equity Shares, Fully Paid (Unquoted)

In Subsidiary CompaniesPipri Ltd.

APAG Holding AG, Switzerland

Kanoria Africa Textiles Plc, Ethiopia

Total Investments at Cost

10

CHF 1000

ETB 10

10

CHF 1000

ETB 10

4,650,550

300

22,386,068

4,650,550

300

22,386,068

48.01

423.14

529.24

1,000.39

48.01

423.14

529.24

1,000.39

Investments at Cost

Equity Shares, Fully Paid (Quoted)

IFCI Ltd.

HDFC Bank Ltd.

Bank of India


Enviro Technology Ltd.

Bharuch Enviro Infrastructure Ltd.

Mittal Tower Premises Co-op. Society Ltd.

Narmada Clean Tech Limited

Woodlands Multispeciality Hospital Limited

Bonds, Fully Paid (Quoted)

8.5% National Highway Authority of India

8.68% National Housing Bank

Total Investments at Fair Value through OCI

Preference Shares, Fully Paid (Quoted)

16.06% Infrastucture Leasing & Financial Services Ltd. 7,500 4,000 58.00 7,500 4,000 57.63

Mutual Funds (Quoted)

HDFC FMP 3360 Days-Sr.30-Regular-Growth 10 5,000,000 65.19 10 5,000,000 61.54

ICICI Prudential Discovery Fund- Dividend Reinvest — — — 10 1,327,365 41.23

Alternative Investment Fund (Unquoted)

IIFL Real Estate Fund (Domestic) Sr.1 — — — 16 485.955 7.79

IIFL Real Estate Fund (Domestic) Sr.2 8 9,313,812 78.38 10 9,313,812 100.92


IIFL Income Opportunities Fund — — — 1 9,936,715 6.52

IIFL Income Opportunities Fund Series-Special Situations 5 4,776,976 34.59 8 4,776,976 45.89

IIFL Seed Venture Fund 10 2,279,590 35.99 10 1,663,948 23.62

ICICI Prudential Real Estate AIF-II 100 373,935 41.73 10 373,935 40.65

Chiratae Trust 100,000 75 6.63 100,000 40 3.25

Equity Fund (Unquoted)

IIFL Assets Revival Fund 2 10 4,523,997 63.51 10 4,523,997 59.68

IIFL National Development Agenda Fund — — — 8 4,922,035 61.62

Total Investments at Fair Value through PL 439.45 616.36

Total Non Current Investments (A) 1,453,85 1,807.71

Mutual Funds (Unquoted)

BSL Floating Rate Fund-STP-Growth — — — 100 142,507 30.82

Total Investments at Fair Value through PL 30.82

Total Current Investments (B) — — — — — 30.82

Investments at Fair Value through OCI

Investments at Fair Value through PL

(B) Current Investment


(A) Non Current Investment

10

2

10

10

10

50

10

10

—

—

200

2,500

9,000

10,000

1,400

5

822,542

2,180

—

—

0.00

4.72

0.93

0.10

0.01

0.00

8.23

0.02

—

—

14.01

10

2

10

10

10

50

10

10

1,000

5,000

200

2,500

9,000

10,000

1,400

5

822,542

2,180

100,000

10,000

0.01

3.61

1.25

0.10

0.01

0.00

8.23

0.02

117.95

59.78

190.96




9 : Other Assets

10 : Inventories

11 : Trade ReceivablesUnsecured, considered good 529.31 551.91

Doubtful 0.74 —

Less : Allowance for doubtful receivables 0.74 —

Total Trade Receivables 529.31 551.91

(a) Capital Advances 0.76 — 38.03 —

(b) Advances other than Capital Advances (i) Other Advances 2.53 6.11 0.29 27.61

(ii) Export Benefits and Claims Receivable 118.94 123.62 (iii) Balance with Government Authorities 108.34 82.80Total Other Assets 3.29 233.39 38.32 234.03

7 : Loans

Non-CurrentNon-Current CurrentCurrent

st31 March 2017st31 March 2018

(Unsecured considered good)

Loans to a related party

Loan to Subsidiary 802.10 93.75 692.12 42.83 Other Loans

Loan to Employees 0.95 1.29 0.64 1.23

Total Loans 803.05 95.04 692.76 44.06

8 : Other Financial Assets(Unsecured considered good)

Security Deposits 13.25 0.50 16.55 1.00

Interest and Dividend Receivable — 10.08 — 34.15 Interest and Fees receivable from Related Parties — 31.27 — 39.12

Total Other Financial Assets 13.25 41.85 16.55 74.27

(At lower of cost and net realisable value)

Raw Materials 188.83 151.85

Raw Materials in transit 80.45 —

Work-in-Progress 12.03 7.21

Finished Goods 79.96 115.57

Stores & Spare Parts 57.84 47.93

Total Inventories 419.11 322.56

(Rs. in million)

Aggregate book value of quoted investments 128.84 — 343.00 —

Aggregate market value of quoted investments 128.84 — 343.00 —

Aggregate value of unquoted investments 1,325.01 — 1,464.71 30.82

Non- CurrentNon-Current Current Non- Current Current



12A : Cash and Cash Equivalent

12B : Other Bank Balances

(Rs. in million)




Balances with Banks 4.26 5.57

Remittance in Transit 16.69 —

Cash on hand 0.37 0.31

Total Cash and Cash equivalent 21.32 5.88

Earmarked balances with Banks (Unpaid Dividend Account) 5.65 5.34

Bank Deposits (held as security) 346.88 370.15

Total Other Bank Balances 352.53 375.49

13 : Current Tax AssetsIncome Tax Payments and Tax Deducted at Source less Provision 195.11 195.30

Total Current Tax Assets 195.11 195.30

14 : Equity Share Capital(Rs. in million)

(a) Authorised Share Capital

Equity Shares of Rs. 5 each 100,000,000 500.00 100,000,000 500.00

(b) Issued, Subscribed and Fully Paid


Add: Forfeited Shares (Amount paid up) 0.02 0.02

Total 218.49 218.49

(c) Terms/rights attached to Equity Shares

The Company has only one class of issued shares i.e. Equity Share having par value of Rs. 5 per share. Each holder of Equity Share is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.

(d) Shares held by holding company(Rs. in million)

Vardhan Limited 26,190,872 130.95 26,133,872 130.67

No. of SharesNo. of Shares AmountAmount





st31 March 2017

st31 March 2018

15 : Other Equity(Rs. in million)

(Rs. in million)


No. of SharesNo. of SharesName of the Shareholder % holding% holding

st31 March 2017

st31 March 2017

st31 March 2018

st31 March 2018

Vardhan Limited 26,190,872 59.94 26,133,872 59.81

R V Investment & Dealers Limited 3,210,120 7.35 3,210,120 7.35

(e) Details of shareholders holding more than 5% shares in the company:

(f) Shares reserved for issue under options:

No Shares have been reserved for issue under options and contracts/commitments for the sale of shares/disinvestment as at the Balance Sheet date.

(g) The Company, during the year 2012-13, had bought back 12,603,167 Equity Shares of Rs. 5 each.

(h) None of the securities are convertible into shares at the end of the reporting period.

(i) No calls are unpaid by any Director or Officer of the Company during the year.

Capital Reserve

As per last Balance Sheet 34.17 34.17

Capital Redemption Reserve


Securities Premium Reserve


Retained Earnings

As per last Balance Sheet 5,628.47 5,524.41

Add : Profit for the Year 56.00 187.20

Add : Actuarial gain/(loss) on Defined Benefit Plan (0.86) (4.26)

Less : Dividend (65.54) (65.54)

Less : Dividend Distribution Tax (13.34) 5,604.73 (13.34) 5,628.47

Other Comprehensive Income (OCI)


Add : Movement in OCI (Net) during the year (22.98) 5.34 5.75 28.32

Total Other Equity 5,878.43 5,925.15



16 : Borrowings

17 : Other Financial Liabilities

18 : Provisions


Non-Current

Non-Current

Non-Current

Non-Current

Non-Current

Non-Current

Current

Current

Current

Current

Current

Current

st31 March 2017

st31 March 2017

st31 March 2017

st31 March 2018

st31 March 2018

st31 March 2018

Secured

Term Loan 1 From Bank 196.88 131.31 289.36 155.73

Loans Repayable on Demand 2 From Banks — 449.38 67.10

Buyer's Credit 2 From Banks — 234.10 255.41

Unsecured —

Commercial Papers 400.00

196.88 814.79 289.36 878.24

Less :

Amount Disclosed under Other Financial Liabilities (Refer Note 17) 131.31 155.73

Total Borrowings 196.88 683.48 289.36 722.51

Current Maturities of Long Term Debts (Refer Note 16) 131.31 155.73

Interest Accrued — 2.79 — 1.08

Security Deposits — 5.94 — 5.14

Liabilities for Capital Goods — 14.22 — 45.271 Unpaid Dividend — 5.65 — 5.34

Employee related Liabilities — 15.96 — 15.46

Other Liabilities 10.04 23.14 14.85 27.16

Total Other Financial Liabilities 10.04 199.01 14.85 255.18

1 th Secured by Fixed Deposits, repayable in five half yearly instalments beginning from 29 September, 2018.2 Secured by hypothecation of Current Assets of the Company. Rs. 70.01 million (Previous year Rs. 178.98 million) additionally secured by movable fixed assets of Ankleshwar plant.

1 These figures does not include any amount, due and outstanding, to be credited to Investor Education and Protection Fund except Rs. 0.67 million (previous year Rs. 0.55 million) which is held in abeyance due to legal case pending.

Provision for Employee Benefits 63.98 28.07 57.66 26.11

Total Provisions 63.98 28.07 57.66 26.11

(Rs. in million)

(Rs. in million)

(Rs. in million)






19 : Income TaxA. Deferred Tax

The major components of deferred tax liabilities/assets arising on account of timing differences are as follows:

(ìn million)st1 April 2017 st31 March 2018

Profit & Loss (Net)

OCI (Net)

(ìn million)st1 April 2016 st31 March 2017

Profit & Loss (Net)

OCI (Net)

Deferred Tax Liability

Timing Difference on PPE & Intangible Assets 656.50 5.61 — 662.11

Fair Value of Investments 3.85 4.77 0.58 9.20

Others 1.35 (0.87) — 0.48

Deferred Tax Assets

MAT Credit Entitlement 18.90 114.85 — 133.75

Unabsorbed Business Losses/Depreciation — 3.16 — 3.16

Expenses relating to Retirement Benefits 24.91 1.83 2.25 28.99

MTM Adjustment on Forward Contracts 1.87 0.87 — 2.74

Net Deferred Tax Liabilities 616.02 (111.20) (1.67) 503.15

B: Reconciliation of tax expense on the accounting profit for the year:


Profit before income tax 82.41 90.99

At India's statutory Income tax rate of 34.608% 28.52 31.49

Tax effect on non-deductible expenses 0.13 1.18

Effect of income exempt from tax (12.04) (24.96)

Effect of income taxed at special rate 9.80 (4.05)

MAT credit entitlement for earlier years — (99.87)

Tax expenses reported in the statement of profit and loss 26.41 (96.21)

(Rs. in million)



Fair Value of Investments 9.20 1.86 (3.20) 7.86

Others 0.48 (0.48) — —

Deferred Tax Assets

MAT Credit Entitlement 133.75 21.17 (0.27) 154.65

Unabsorbed Business Losses/Depreciation 3.16 15.36 — 18.52



Others — 0.25 — 0.25

Net Deferred Tax Liabilities 503.15 5.24 (3.39) 505.00

20 : Trade Payable

21 : Other Current Liabilities

23 : Other Income


Note : There are no Micro, Small & Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2018. This information required to be disclosed under the Micro, Small & Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

(ìn million)st31 March 2017

st31 March 2018

Trade Payable

Total outstanding dues of Micro and Small Enterprises — —

Total outstanding dues of creditors other than Micro and Small Enterprises 473.09 253.68

Total Trade Payables 473.09 253.68


st31 March 2018

Interest Income

On Investments 22.31 37.40

From Others 35.09 32.36

From Related Parties 33.87 22.40

Dividend Income 4.92 9.77

Gain on Sale of Investments classified as FVTPL (Net) 10.83 16.22

Gain on sale of Debt Securities classified as FVTOCI 2.64 —

Gain on reclassification of FVTOCI Debt Securities 29.25 5.28

Fair value gain on Financial Instruments classified as FVTPL (Net) 14.83 58.26

Profit on Fixed Assets sold/discarded (Net) 2.78 —

Foreign Exchange Rate Fluctuation (Net) 47.65 —

Guarantee fee from Related Parties 16.72 16.72

Other Non Operating Income 12.19 28.29

Total Other Income 233.08 226.70

22 : Revenue from Operations


st31 March 2018

Statutory Liabilities 5.73 6.26

'Customers' Credit Balances 2.26 2.19

Total Other Current Liabilities 7.99 8.45


st31 March 2018

(a) Sale of Products

Manufactured products 3,401.07 3.099.44

Traded products 13.46 31.40

Total Sale 3,414.53 3,130.84

(b) Other Operating Revenues

Miscellaneous Sales 32.74 25.92

Renewal Energy Certificate benefits 9.57 93.12

Incentives 11.30 23.83

Total Other Operating Revenues 53.61 142.87

Total Revenue from Operations (Refer note 34) 3,468.14 3,273.71

(Rs. in million)





24 : Employee Benefits Expense

26 : Other Expenses



25 : Finance Costsst31 March 2017

st31 March 2018

Interest expense 42.66 29.30

Exchange difference regarded as an adjustment to Borrowing Cost 26.14 —

Bank/Finance charges 1.78 3.37

Total Finance Cost 70.58 32.67

Consumption of Stores & Spare parts etc. 67.10 69.45

Other Manufacturing Expenses 15.97 18.29

Power & Fuel 257.57 234.92

Repairs to -

Plant & Machinery 37.48 36.45

Buildings 1.81 1.70

Others 5.99 7.20

Water Charges & Cess 20.64 19.29

Rates & Taxes 6.03 6.65

Rent 8.09 7.39

Insurance 6.46 6.39

Legal and Professional Charges 31.35 28.69

Miscellaneous Expenses 47.95 43.33

CSR Expenditure (Refer Note No. 31) 1.80 2.31

Foreign Exchange Rate Fluctuation (Net) — 4.02

Commission & Brokerage to Others 9.81 10.02

Freight, Handling & Other Charges 41.12 38.25

Directors' Fees 1.64 1.54

Travelling Expenses 12.20 15.07

Directors' Remuneration 25.64 22.45

Provision for bad & doubtful Debts & Advances (net) 0.74 —

Unrealized Debts and Claims written off 0.41 1.55

Loss on Fixed Assets sold/discarded (Net) — 0.84

Payment to Auditors 2.42 2.27

Fair Value Loss on Foreign Exchange Forward Contracts 1.24 10.20

Total Other Expenses 603.46 588.27

Borrowings Cost capitalised during the year Rs. 14.12 million (Previous year Rs. 13.69 million).


Salaries, Wages, Bonus & Gratuity etc.

(including payments to Contractors) 203.95 180.41

Contribution to Provident Fund 10.19 8.98

Staff Welfare Expenses 16.49 16.46

Total Employee Benefits Expense 230.63 205.85

(Rs. in million)



(a) Statutory Auditors

Audit Fees 0.80 0.80

For Certificates & Others 1.32 1.06

For Travelling and out of pocket expenses 0.14 0.16

(b) Cost Auditors



Total payment to Auditors 2.42 2.27

Additional Information regarding Payment to Auditors

27 : Exceptional Item


st31 March 2018

Write down in the value of Renewable Energy Certificates on reduction in floor

price as notified by the Central Electricity Regulatory Commission — 184.17

28 : Other Comprehensive Income (OCI)

29 : Earnings per Share (EPS)st31 March 2017

st31 March 2018

Details for calculation of Basic and Diluted Earning per Share:

Profit after Tax as per Statement of Profit and Loss (Rs. in Million) 56.00 187.20

Weighted average number of Equity Share 43,693,333 43,693,333

Basic and Diluted Earning per Share (Rs.) (Face Value Rs. 5 each) 1.28 4.28


A. Items that will not be reclassified to Profit or Loss -

1. Actuarial Gain/(Loss) on Defined Benefit Plan (1.32) (6.51)

Current Tax 0.27 —

MAT Credit Entitlement (0.27) —

Income Tax Effect 0.46 2.25

2. Net Gain/(Loss) on Equity instruments designated as FVTOCI 0.79 1.31

Income Tax Effect 0.09 —

Net OCI not to be reclassified to Profit or Loss 0.02 (2.95)

B. Items that will be reclassified to Profit or Loss -

1. Net Gain/(Loss) on Debt Securities classified as FVTOCI 2.28 10.30

Income Tax Effect (0.26) (1.19)

2. (Gain)/Loss transferred to Profit or Loss on reclassification of Debt Securities (29.25) (5.28)


Net OCI to be reclassified to Profit or Loss (23.86) 4.44


(Rs. in million)



(i) Contingent Liabilities

(a) Claims/Disputed Liabilities not acknowledged as Debt

Excise Duty Demands (paid Rs. 6.54 million) 13.13 17.84

Sales Tax Demands (paid Rs. 0.43 million) 0.43 0.43

Income Tax Demands (paid Rs. 55.54 million) 55.54 55.54

Other Claims being disputed by the Company (paid Rs. 1.00 million) 5.56 4.19

(b) Outstanding Bank Guarantees 27.34 35.99

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and

not provided for 1.59 161.23

Advance paid 0.76 38.03

Uncalled Liability on Investments 15.50 28.00

Proposed dividends on Equity shares:

Final cash dividend for the year ended on 31 March 2018: INR 1.5 per share

(31 March 2017: INR 1.5 per share) 65.54 65.54

DDT on proposed dividend 13.47 13.34

79.01 78.88

30 : Commitments and Contingencies:

31 : Amount spent on CSR Activities:

32 : Distribution Proposed:

st31 March 2017

st31 March 2017

st31 March 2017

st31 March 2018

st31 March 2018

st31 March 2018


Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognised as a liability (including DDT thereon) as stat 31 March 2018.

(Rs. in million)

Gross amount required to be spent by the Company during the year 1.80 2.31

Amount spent during the year on:

Promotion of Education 1.63 1.85

Empowering women through employment enhancing skills 0.07 0.41

Preventive health care 0.10 0.05

1.80 2.31



33 : Segment Information


AlcoChemicals

AlcoChemicals

Solar Power

Solar Power

Total Total


(A) Primary Segment information (by Business segment)

Business Segment

The Company is organised into business units based on its products and services and has following reportable segments:

I. Alco Chemicals

II. Solar Power

(B) Secondary Segment information

Not applicable, as all the plants of the Company are located in India and Exports does not constitute 10% or more of total Segment Revenue.

(C) Other Disclosures

Basis of pricing inter/Intra segment transfer and any change therein:

At prevailing market-rate at the time of transfers.

Segment Accounting Policies

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Type of products included in each reported business segment:

Alco Chemicals business includes Pentaerythritol, Sodium Formate, Acetaldehyde, Formaldehyde, Hexamine and Resin etc. and Solar Power business includes

Power generation from Solar energy.

st34 : Consequent to the introduction of Goods and Service Tax (GST) with effect from 1 July 2017, Central Excise, Value Added Tax (VAT) etc. have been subsumed

into GST. In accordance with Indian Accounting Standard - 18 on Revenue and Schedule III of the Companies Act, 2013, unlike Excise duties, levies like GST, VAT stetc. are not part of Revenue. Accordingly, the figures of Revenue from Operation and Segment Revenue of Alco Chemicals for the Year ended 31 March, 2018 are

not comparable with the previous year.

Segment Revenue

Revenue from Operations (Refer note 34) 3,422.90 45.24 3,468.14 3,146.79 126.92 3,273.71

Segment Result 65.25 (4.43) 60.82 165.20 68.33 233.53

Less: (i) Finance Costs 70.58 32.67

(ii) Exceptional Item — 184.17

(iii) Un-allocable expenditure net off (92.17) (74.30)

Un-allocable income


Tax Expense 26.41 (96.21)

Net Profit: 56.00 187.20

Segment Assets 4,749.61 346.94 5,096.55 4,461.48 376.26 4,837.74

Un-allocable Corporate Assets 3,167.91 3,436.85

Total Assets: 8,264.46 8,274.59

Segment Liabilities 567.48 8.94 576.42 389.00 5.08 394.08

Un-allocable Corporate Liabilities 1,591.12 1,736.87

Total Liabilities: 2,167.54 2,130.95

Other Disclosures

Capital Expenditure 429.06 — 429.06 294.16 0.06 294.22

Un-allocable Capital Expenditure 4.53 8.38

Total Capital Expenditure: 433.59 302.60

Depreciation & Amortization 168.79 34.08 202.87 154.43 41.18 195.61

Un-allocable Depreciation 9.01 8.71

Total Depreciation & Amortization: 211.88 204.32

(Rs. in million)



35 : Disclosures as required under Indian Accounting Standard 19 on "Employee Benefits"


A. Defined Benefit Plan

The Company has unfunded scheme for payment of gratuity to all eligible employees calculated at specified number of days of last drawn

salary depending upon tenure of service for each year of completed service subject to minimum five years of service payable at the time of

separation upon superannuation or on exit otherwise.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status

and amounts recognised in the balance sheet for the Post - retirement benefit plans .

5. Sensitivity Analysis

The Sensitivity Analysis below has been determined based on reasonably possible change of the respective assumptions occurring at the end of the reporting

period, while holding all other assumptions constant. These sensitivities show the hypothetical impact of a change in each of the listed assumptions in isolation.

While each of these sensitivities holds all other assumptions constant, in practice such assumptions rarely change in isolation. For presenting the sensitivities,

the present value of the Defined Benefit Obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same

as that applied in calculating the Defined Benefit Obligation presented above. There was no change in the methods and assumptions used in the preparation of

the Sensitivity Analysis from previous year.


1. Change in the Present Value of Obligation

- Present Value of Obligation as at the beginning 67.74 58.10

- Current Service Cost 4.17 3.64

- Interest Expense or Cost 5.01 4.53

- Actuarial (gains) / losses arising from:

change in financial assumptions (0.84) 1.43

experience variance 2.16 5.07

- Benefits paid (3.41) (5.03)

- Present Value of Obligation as at the end 74.83 67.74

2. Expenses recognised in the Statement of Profit & Loss



Total 9.18 8.17

3. Other Comprehensive Income




Total 1.32 6.50

4. Actuarial Assumptions

(a) Financial Assumptions

Discount rate (per annum) 7.60% 7.40%

Salary growth rate (per annum) 7.00% 7.00%

(b) Demographic Assumptions

Mortality rate (% of IALM 06-08) 100% 100%

Attrition/Withdrawal rates, based on age: (per annum)

up to 44 years 2.00% 2.00%

above 44 years 1.00% 1.00%

Gratuity Gratuity

(Rs. in million)





Discount rate increase by 1% (70.99) (64.30)

Discount rate decrease by 1% 79.15 71.65

Salary Growth rate increase by 1% 79.13 71.63

Salary Growth rate decrease by 1% (70.94) (64.25)

Weighted average duration (based on discounted cash flow) 5 Years

Expected cash flow over the next (valued on undiscounted basis)

1 year 10.85

2 to 5 year 43.69

6 to 10 year 26.57

More than 10 year 46.74

Particulars

6. Maturity Profile of Defined Benefit Obligation

7. In respect of Provident Fund in the nature of defined benefit plans contribution amounting to Rs. 2.92 million (Previous year Rs. 2.55 million) and the accrued

past service liability of Rs. Nil (Previous year Rs. Nil) as valued by the actuary using Projected Unit Credit Method is recognised as expenses and included in

"Employee Benefits Expense".

8. Description of Risk Exposures

Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary over time. Thus, the Company is

exposed to various risks in providing the above gratuity benefit which are as follows:

Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise due to non availability of enough cash/cash

equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future.

Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will

have a bearing on the plan's liability.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual

experience turning out to be worse compared to the assumption.

Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a

risk of change in regulations requiring higher gratuity payouts.

B. Defined Contribution Plan

The Company contributes 12% of salary for all eligible employees towards Provident Fund managed either by approved trust or by the Central Government and

debit the same to statement of Profit and Loss. The provident fund set up by the employers, require interest shortfall to be met by the employers. The fund set up by

the Company does not have existing deficit of interest shortfall. The amount debited to Statement of Profit and Loss towards Provident Fund contribution during

the year was Rs. 10.19 million (previous year Rs. 8.98 million).

(Rs. in million)

The impact of Sensitivity analysis on Defined Benefit Plan is given below:



36 : Details of Loans given, Investment made, Guarantees given and Security provided under Section 186 (4) of the

Companies Act, 2013.


Name of the Company Relation Nature Purpose (ìn million)st31 March 2017st31 March 2018

37 : Category-wise classification of Financial InstrumentsNon-Current Current

st31 March 2017 st31 March 2017st31 March 2018 st31 March 2018

ReferNote

Financial Assets

Measured at cost

Investments 6A 1,000.39 1,000.39 — —

Measured at amortised cost

Trade Receivables 11 — — 529.31 551.91

Cash and cash equivalents 12A — — 21.32 5.88

Other Bank balances 12B — — 352.53 375.49

Loans 7 803.05 692.76 95.04 44.06

Other Financial Assets 8 13.25 16.55 41.85 74.27

Measured at fair value through profit or loss

Investments 6A & B 439.45 616.36 — 30.82

Measured at fair value through other

comprehensive income

Investments 6A 14.01 190.96 — —

Total Financial Assets 2,270.15 2,517.02 1,040.05 1,082.43

Pipri Ltd. Subsidiary Original Investment in Business 48.01 48.01

equity shares

APAG Holding AG Subsidiary Original Investment in Acquisition 423.14 423.14

equity shares

Kanoria Africa Textiles Plc Subsidiary Original Investment in To setup green field

equity shares textile plant 705.05 705.05APAG Holding AG Subsidiary Loans Capital Expenditure, (Interest bearing) Working Capital and 479.70 450.11 acquisition

Kanoria Africa Textiles Plc Subsidiary Loans Capital Expenditure

(Interest bearing) and Working Capital 411.08 280.10

Kanoria Africa Textiles Plc Subsidiary Pledge of shares of Borrowing by Kanoria

Kanoria Africa Africa Textiles Plc

Textiles Plc from Export-Import 705.05 705.05

Bank of India

1 APAG Elektronik s.r.o Subsidiary Corporate Borrowing by APAG

Guarantee Elektronik s.r.o from

Ceskoslovenska 322.49 276.99

obchodni banka, a.s.

2 Kanoria Africa Textiles Plc Subsidiary Corporate Borrowing by

Guarantee Kanoria Africa Textiles 1,430.97 1,426.45

Plc from Export-

Import Bank of India

1 Loan Outstanding Rs. 176.95 million (Previous year Rs. 180.94 million)2 Loan Outstanding Rs. 1,365.86 million (Previous year Rs. 1,361.54 million)

(Rs. in million)

(Rs. in million)




Non-Current Current


ReferNote

Financial Liabilities


Borrowings 16 196.88 289.36 683.48 722.51

Trade Payables 20 — — 473.09 253.68

Other Financial Liabilities 17 — — 192.97 252.15


Other Financial Liabilities 17 10.04 14.85 6.04 3.03

Total Financial Liabilities 206.92 304.21 1,355.58 1,231.37

38 : Fair Value Measurements of Financial InstrumentsThe following table provides fair value measurement hierarchy of the Company's financial assets and liabilities:

Financial assets measured at fair value through profit or loss

Quoted Preference shares 58.00 — — 57.63 — —

Quoted Mutual funds 65.19 — — 102.77 — —

Unquoted Mutual funds — — — — 30.82 —

Unquoted Alternate Investment funds — 252.75 — — 334.66 —

Unquoted Equity funds — 63.51 — — 121.30 —

Financial assets measured at fair value through other


Quoted Equity Shares 5.65 — — 4.87 — —

Unquoted Equity Shares — — 8.36 — — 8.36

Quoted Debentures/Bonds — — — 177.73 — —

Financial liabilities measured at fair value through profit or loss

Forward Exchange contract (Net) 16.08 — — 17.88 — —

stFair value hierarchy as at 31 March 2018

Significant observable

inputs (Level 2)

Significant unobservable

inputs(Level 3)

Quoted prices in

active markets (Level 1)

Financial assets/financial liabilities

Financial Instruments measured at amortised cost

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair value since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually bereceived or settled.

(Rs. in million)

(Rs. in million)

stFair value hierarchy as at 31 March 2017


inputs (Level 2)


inputs(Level 3)

Quoted prices in





39 : Financial Risk Management - Objectives and PoliciesThe company’s principal financial liabilities comprise borrowings, trade payables, other financial liabilities and financial guarantee contracts. The main purpose

of these financial liabilities is to finance the Company’s operations. The Company’s financial assets include investments, trade receivables, cash and cash

equivalents, other bank balances and loans.

The Company is exposed to market risk and credit risk. The Company has a Risk management policy and its management is supported by a Risk management

committee that advises on risks and the appropriate risk governance framework for the Company. The Risk management committee provides assurance to the

Company’s management that the Company’s risk activities are governed by appropriate policies and procedures and that risks are identified, measured and

managed in accordance with the Company’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks,

which are summarised below.

(i) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk

comprises two types of risk: currency risk and other price risk, such as commodity price risk and equity price risk. Financial instruments affected by market

risk include FVTOCI investments, FVTPL investments, trade payables, trade receivables, etc.

(a) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a foreign currency exposure will fluctuate because of changes in foreign exchange

rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities. The Company

monitors the foreign exchange fluctuations on continuous basis and advises the management of any material adverse effect on the Company and for taking

risk mitigtion measures. The Company enters into forward exchange contracts against its foreign currency exposure relating to underlying liabilities and firm

commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in USD, Euro and SGD exchange rates, with all other variables held constant.

The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Company’s exposure to foreign

currency changes for all other currencies is not material.

Total hedged foreign currency payable (net)- USD 0.83 million equivalent to Rs. 54.20 million (Previous year USD 1.00 million equivalent to Rs. 64.84 million).

Foreign Currency Receivable/ (Payable) (Net) 3.41 222.12 2.55 205.69 (12.00) (7.38) 5.27 341.85 2.67 184.77 (2.12) (98.21)

Depreciation in Indian Rupees 5% 5% 5% 5% 5% 5%

Effect on Profit before Tax 11.11 10.28 (0.37) 17.09 9.24 (4.91)

Appreciation in Indian Rupees 5% 5% 5% 5% 5% 5%

Effect on Profit before Tax (11.11) (10.28) 0.37 (17.09) (9.24) 4.91


USD USDINR INREURO EUROINR INRJPY SGDINR INR

(Rs. in million)




(ii) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The

Company is exposed to credit risk from its operating activities (primarily trade receivables).

Trade receivables

An impairment analysis is performed at each reporting date on an individual basis for all the customers. In addition, a large number of minor receivables are

grouped into homogenous groups and assessed for impairment collectively. The calculation is based on credit losses historical data. The maximum

exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed as the Company does not hold collateral as security. The

Company has evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and

industries.

(iii) Liquidity risk

Liquidity risk is the risk that Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled

by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity

management requirements. The Company's exposure to liquidity risk arises primarily from mismatches of the maturities of financial asset and liabilities.

The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities

agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.

The table below analysis financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the

contractual maturity date. The amount disclosed in the table are the contractual undiscounted cash flow.

(c) Equity price risks

The Company’s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the

investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity

instruments/mutual funds. Reports on the investment portfolio are submitted to the Company’s management on a regular basis.

Equity price sensitivity

The following table shows the effect of price changes in quoted and unquoted equity shares (other than that in subsidiaries), quoted preference shares,

quoted and unquoted equity mutual funds, unquoted alternative investment funds and unquoted equity funds.

(ìn million)st31 March 2018 st31 March2017

Investment 388.27 568.05

Price change +5% -5% +5% -5%

Effect on Profit before Tax 19.41 (19.41) 28.40 (28.40)

(Rs. in million)

(ìn million)st31 March 2018 st31 March2017

Consumption of Methanol 1,807.21 1,395.35

Price change +5% -5% +5% -5%

Effect on Profit before Tax (90.36) 90.36 (69.77) 69.77

(b) Commodity price risks

The company is affected by the price volatility of methanol, one of its major raw material. Its operating activities require a continuous supply of methanol. The Company monitors price and demand/supply sitution on continuous basis and advises the management of any material adverse effect on the Company and for taking risk mitigtion measures.

Commodity price sensitivity

The following table shows the effect of price changes in Methanol on Profit before Tax, with all other variable held constant: (Rs. in million)




Relationship Name of the Related Parties

Holding Company 1. Vardhan Limited

2. Pipri Limited

3. Kanoria Africa Textiles Plc, Ethiopia

4. APAG Holding AG, Switzerland

5. APAG Elektronik AG, Switzerland

6. APAG Elektronik s.r.o., Czech Republic

7. CoSyst Control Systems GmbH, Germany

8. APAG Elektronik LLC, USAth 9. APAG Elektronik S. De R.L. De C.V., Mexico (up to 4 March, 2018)

th10. APAG Services S. De R.L. De C.V., Mexico (up to 4 March, 2018)th11. APAG Elektronik Corp., Canada (w.e.f. 13 February, 2018)

12. Mr. R. V. Kanoria - Chairman & Managing Director

13. Mr. S. V. Kanoria - Whole Time Director

14. Mr. Amitav Kothari - Director

15. Mr. H.K. Khaitan - Director

16. Mr. Ravindra Nath - Director

17. Mr. G. Parthasarathy - Director

18. Mr. S. L. Rao - Director

19. Mr. A. Vellayan - Director

20. Mrs. M. Kanoria - Director

21. Mr. A. V. Kanoria

22. Mrs. V. Kanoria

23. KPL International Limited

24. Kanoria Employees' Provident Fund Trust

41 : Related Party Disclosures: (i) List of related parties and relatives with whom transaction taken place:

Subsidiary Companies

Key Management Personnel (KMP)

Relative of KMP

Enterprise over which KMP exercises significant influence

Post Employment Benefit Plan entity

Less than 1 year 1 to 5 year Total Carrying valuestAs at 31 March, 2018

Borrowings (refer note 16) 814.79 196.88 1,011.67 1,011.67

Trade payable (refer note 20) 473.09 — 473.09 473.09

Other financial liabilities (refer note 17) 67.70 10.04 77.74 77.74stAs at 31 March, 2017

Borrowings (refer note 16) 878.42 289.36 1,167.78 1,167.60

Trade payable (refer note 20) 253.68 — 253.68 253.68

Other financial liabilities (refer note 17) 99.45 14.85 114.30 114.30

The Company's objective when managing capital (defined as net debt and equity) are to safeguard the Company's ability to continue as a going concern in order to

provide returns to shareholders and benefit for other stakeholders, while protecting and strengthening the balance sheet through the appropriate balance of debt

and equity funding. The Company manages its capital structure and makes adjustments to it, in light of changes to economic conditions and strategic objectives

of the Company. The Company's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing

loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans

and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

40 : Capital Management

(Rs. in million)




2017-18

Nature of Transaction

Dividend Paid

Vardhan Limited 39.29 — — — 39.20 — — —

Mr. R. V. Kanoria — 0.69 — — — 0.65 — —

Mr. S. V. Kanoria — 0.83 — — — 0.83 — —

Mr. A. Vellayan — 0.02 — — — 0.02 — —

Mrs. M. Kanoria — 0.75 — — — 0.75 — —

Mr. A. V. Kanoria — 0.65 — — — 0.65 — —

Directors' Fees

Mr. Amitav Kothari — 0.29 — — — 0.29 — —

Mr. H.K. Khaitan — 0.36 — — — 0.32 — —

Mr. Ravinder Nath — 0.19 — — — 0.17 — —

Mr. G. Parthasarathy — 0.26 — — — 0.17 — —

Mr. S. L. Rao — 0.18 — — — 0.16 — —

Mr. A. Vellayan — 0.10 — — — 0.05 — —

Mrs. M. Kanoria — 0.21 — — — 0.21 — —

Loans & Advances Given*

Kanoria Africa Textiles PLC 135.15 — — — 241.07 — — —

APAG Holding AG 67.68 — — — (38.01) — — —

Receipt towards Loans & Advances

Repayment


APAG Holding AG 38.09 — — — — — — —

Interest & Fees for the year


APAG Holding AG 16.90 — — — 14.63 — — —

APAG Elektronik s.r.o. 2.41 — — — 2.45 — — —

Interest & Fees Received


APAG Holding AG 31.53 — — — 8.46 — — —

APAG Elektronik s.r.o. 4.86 — — — 2.98 — — —

2016-17

Holding/ Subsidiary Companies

KMP/ Relative of

KMP

Enterprise over which

KMP exercises

significant influence

Post Employment

BenefitPlan entity


KMP/ Relative of

KMP


KMP exercises


Post Employment

BenefitPlan entity

(Rs. in million)



(ii) Transaction with related parties:


As per our report of even date annexed For JITENDRA K AGARWAL & ASSOCIATESChartered AccountantsFirm Registration No.318086E



(DIN:01097705)


(DIN:00003792)

N. K. NOLKHA Group Chief Financial Officer

N. K. SETHIACompany Secretary

ABHISHEK MOTHAPartnerMembership No. 066653

Place: New Delhi thDate: 18 May, 2018

42. Figures for the previous year have been regrouped/rearranged, wherever found necessary.

Signature to Note 1 to 42

Name of the Related Parties Name of the Related Parties


Remuneration

Mr. R. V. Kanoria — 18.08 — — — 14.70 — —

Mr. S. V. Kanoria — 7.56 — — — 5.16 — —

Mr. T. D. Bahety — — — — — 2.59 — —

Mrs. V. Kanoria — 2.92 — — — 2.66 — —

Commission Paid

KPL International Limited — — 2.06 — — — 2.43 —

Rent received

KPL International Limited — — 0.60 — — — 0.58 —

Contribution during the year(includes Employees' share and contribution)

Kanoria Employees’ Provident Fund Trust — — — 6.59 — — — 5.76

stBalances as at 31 March

Investments

Pipri Limited 48.01 — — — 48.01 — — —


APAG Holding AG 423.14 — — — 423.14 — — —

Loans & Advances


APAG Holding AG 479.70 — — — 450.11 —

Interest and fees Receivable


APAG Holding AG — — — — 14.63 — —

APAG Elektronik s.r.o. — — — — 2.45 — — —

Remuneration

Mrs. V. Kanoria — 0.29 — — — 0.26 — —

Maximum amount outstanding during the year Investments

Pipri Limited 48.01 — — — 48.01 — — —


APAG Holding AG 423.14 — — — 423.14 — — —

Loans & Advances


APAG Holding AG 479.70 — — — 488.12 — — —


KMP/ Relative of

KMP


KMP exercises


Post Employment

BenefitPlan entity


KMP/ Relative of

KMP


KMP exercises


Post Employment

BenefitPlan entity

* Includes foreign exchange rate fluctuation

2017-18 2016-17

(Rs. in million)



TO THE MEMBERS OF


REPORT ON THE CONSOLIDATED IND AS FINANCIAL STATEMENTS

We have audited the accompanying consolidated Ind AS nancial statements of KANORIA CHEMICALS & INDUSTRIES LIMITED (hereinafter referred to as “the

Company”) and its subsidiaries (collectively referred to as 'the Group') comprising of the Consolidated Balance Sheet as at March 31, 2018, the Consolidated

Statement of Prot and Loss (including other comprehensive income), Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity for

the year then ended, and a summary of signicant accounting policies and other explanatory information (hereinafter referred to as “the Consolidated Ind AS

Financial Statements”).

MANAGEMENT'S RESPONSIBILITY FOR THE CONSOLIDATED IND AS FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for preparation of these consolidated Ind AS nancial statements in terms of the requirements of the Companies

Act, 2013 (“the Act”) that give a true and fair view of the consolidated nancial position, consolidated nancial performance including other comprehensive

income, consolidated cash ows and consolidated statement of changes in equity of the Group in accordance with the accounting principles generally accepted in

India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with the relevant rules issued thereunder. The respective

Board of Directors / Management of the companies included in the Group is responsible for maintenance of adequate accounting records in accordance with the

provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of

appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of

adequate internal nancial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the

preparation and presentation of the consolidated Ind AS nancial statements that give a true and fair view and are free from material misstatement, whether due

to fraud or error, which have been used for the purpose of preparation of the consolidated Ind AS nancial statements by the Directors of the Company, as

aforesaid.


Our responsibility is to express an opinion on these consolidated Ind AS nancial statements based on our audit. While conducting the audit, we have taken into

account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of

the Act and the Rules made thereunder.

We conducted our audit of the consolidated Ind AS nancial statements in accordance with the Standards on Auditing specied under Section 143(10) of the Act

and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with

ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated Ind AS nancial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated Ind AS nancial statements. The

procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated Ind AS nancial

statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal nancial control relevant to the Company's

preparation of the consolidated Ind AS nancial statements that give a true and fair view in order to design audit procedures that are appropriate in the

circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made

by the Company's Board of Directors, as well as evaluating the overall presentation of the consolidated Ind AS nancial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditor's in terms of their report referred to in sub-paragraph (2) of

the Other Matters paragraph below, other than the nancial statements as certied by the management and referred to sub paragraph (3) of the other matter

paragraph below, is sufcient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS nancial statements.






OPINION

In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of other auditors on

separate nancial statements and on the other nancial information of the subsidiaries, the aforesaid consolidated Ind AS nancial statements give the

information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of

the consolidated state of affairs of the Group as at March 31, 2018 and their consolidated prot (including other comprehensive income), their consolidated cash

ows and the consolidated statement of changes in equity for the year ended on that date.

OTHER MATTERS

1. The corresponding nancial information of the Group as at and for the year ended March 31, 2017 included in these consolidated Ind AS nancial

statements, are based on the previously issued Consolidated Financial Statements for the year ended March 31, 2017, prepared in accordance with the

Indian Accounting Standards (Ind AS) under section 133 of the Act read with rules thereunder which were audited by our predecessor auditor, on which they

expressed an unmodied opinion in their audit report dated May 30, 2017 to the attached Consolidated Ind AS nancial statements.

2. We did not audit the nancial statements of Pipri Ltd., an Indian subsidiary, whose nancial statements reect total assets of Rs. 176.53 million as at March

31, 2018, total revenues of Rs. 11.11 million and net cash inow of Rs. 0.43 million for the year ended on that date, as considered in the statements. The

nancial statements have been audited by other auditor whose report has been furnished to us by the management. These audited nancial statements

have not been prepared in accordance with Indian Accounting Standards, as the subsidiary is a Non Banking Financial Company. These Financial

Statements have been adjusted for difference in accounting principle to comply with the Ind AS nancial Statement by the management of the Company. We

have audited these Ind AS conversion adjustments made by the Company's management. Our opinion on the consolidated nancial statements, insofar as

it relates to the amounts and disclosures included in respect of the subsidiary, and our report in terms of sub-section (3) of Section 143 of the Act, insofar as

it relates to the aforesaid subsidiary, is based solely on the report of the other auditor and the conversion adjustments prepared by the management of the

Holding Company and audited by us.

3. We did not audit the consolidated nancial statement of APAG Holding AG and nancial Statement of Kanoria Africa Textiles PLC, the foreign subsidiaries

whose nancial statements reect total assets of Rs. 5,998.86 million as at March 31, 2018, total revenues of Rs. 5,239.25 million and net cash outow of

Rs. 63.83 million for the year ended on that date, as considered in the consolidated Ind AS nancial statements. These consolidated nancial

statement/nancial statements/nancial information are audited as per the local law of the respective countries. The Company's management has

converted the nancial statements of these foreign subsidiaries from accounting principles generally accepted in their respective countries to accounting

principles generally accepted in India so as to comply with the Ind AS compliant nancial statement. We have audited these conversion adjustments made

by the Company's management. Our opinion on the consolidated nancial statements in so far as it relates to the amounts included in respect of these

foreign subsidiaries, is based solely on such nancial statement /nancial information which have been converted into Ind AS nancial statement by the

management and have been audited by us.

Our opinion on the consolidated Ind AS nancial statements, and our report on Other Legal and Regulatory Requirements below, is not modied in respect of

the above matters with respect to our reliance on the work done and the reports of the other auditors and the nancial statements / nancial information

certied by the Management.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

As required by Section 143 (3) of the Act, we report, to the extent applicable, that:

a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit

of the aforesaid consolidated nancial statements;

b. in our opinion proper books of account as required by law relating to preparation of the aforesaid consolidated nancial statements have been kept so far as

it appears from our examination of those books and the reports of the other auditors.



c. the consolidated balance sheet, the consolidated statement of prot and loss (including other comprehensive income), the consolidated cash ow

statement and the consolidated statement of changes in equity dealt with by this Report are in agreement with the relevant books of account maintained for

the purpose of preparation of the consolidated nancial statements;

d. in our opinion, the aforesaid consolidated nancial statements comply with the Indian Accounting Standards specied under Section 133 of the Act;

e. on the basis of the written representations received from the directors of the Holding Company as on March 31, 2018 taken on record by the Board of

Directors of the Holding Company and the reports of the statutory auditors of its subsidiary company incorporated in India, none of the directors of the Group

companies incorporated in India is disqualied as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act;

f. with respect to the adequacy of the internal nancial controls with reference to nancial statement of the Group and the operating effectiveness of such

controls, refer to our separate Report in Annexure 'A'. Our report expresses an unmodied opinion on the adequacy and operating effectiveness of the

Company's internal nancial controls with reference to nancial statements; and

g. with respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, (as

amended), in our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the report of the

other auditors on separate nancial statements as also the other nancial information of the subsidiaries, as noted in the 'Other matter' paragraph:

i. the consolidated nancial statements disclose the impact of pending litigation on the consolidated nancial position of the Group – Refer Note No.

30 to the consolidated nancial statements;

ii. The Group did not have any material foreseeable losses on long-term contracts including derivative contracts; and

iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company

and its subsidiary company, incorporated in India except for Rs. 0.67 million which is held in abeyance due to pending legal cases.

(Abhishek Mohta)

Partner









The Annexure referred to in paragraph 1 (f) under the heading “Report on Other Legal and Regulatory Requirements” of our Independent Auditor's

Report of even date in respect to the internal financial control under clause (i) of sub-section 3 of section 143 of the Act of M/s Kanoria Chemicals &

Industries Limited for the year ended March 31, 2018, we report that:

We have audited the internal nancial controls over nancial reporting of KANORIA CHEMICALS & INDUSTRIES LIMITED (“the Holding Company”) and its

subsidiary companies which are companies incorporated in India as of March 31, 2018 in conjunction with our audit of the consolidated nancial statements

of the Company for the year ended on that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Respective Board of Directors of the Holding Company and its subsidiary companies, which are companies incorporated in India, are responsible for

establishing and maintaining internal nancial controls based on the internal control over nancial reporting criteria established by the Company considering

the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute

of Chartered Accountants of India ('ICAI'). These responsibilities include the design, implementation and maintenance of adequate internal nancial controls

that were operating effectively for ensuring the orderly and efcient conduct of its business, including adherence to company's policies, the safeguarding of its

assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable

nancial information, as required under the Companies Act, 2013.


Our responsibility is to express an opinion on the Company's internal nancial controls over nancial reporting based on our audit. We conducted our audit in

accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing,

issued by ICAI and deemed to be prescribed under section 143 (10) of the Companies Act, 2013, to the extent applicable to an audit of internal nancial

controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal nancial controls over nancial reporting was

established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal nancial controls system over nancial reporting and

their operating effectiveness. Our audit of internal nancial controls over nancial reporting included obtaining an understanding of internal nancial controls

over nancial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal

control based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement

of the nancial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion on the Company's internal nancial

controls system over nancial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company's internal nancial control over nancial reporting is a process designed to provide reasonable assurance regarding the reliability of nancial

reporting and the preparation of nancial statements for external purposes in accordance with generally accepted accounting principles. A company's internal

nancial control over nancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,

accurately and fairly reect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded

as necessary to permit preparation of nancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of

the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance

regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the

nancial statements.




INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal nancial controls over nancial reporting, including the possibility of collusion or improper management

override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal nancial

controls over nancial reporting to future periods are subject to the risk that the internal nancial control over nancial reporting may become inadequate

because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion, the Holding Company and its subsidiary company, which are company incorporated in India, have, in all material respects, an adequate internal

nancial controls system over nancial reporting and such internal nancial controls over nancial reporting were operating effectively as at March 31, 2018,

based on the internal control over nancial reporting criteria established by the Company considering the essential components of internal control stated in the

Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

OTHER MATTERS

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal nancial controls over nancial reporting in

so far as it relates to one (1) subsidiary is based on the corresponding reports of the auditors of such companies.

(Abhishek Mohta)

Partner








Consolidated Balance SheetstAs at 31 March 2018

(Rs. in million)

5A

5B

5B

6

7

8

9

10

6

11

12A

12B

7

8

13

9

stAs at 31 March 2017 Notes

218.49

5,660.80

5,879.29

60.39

5,939.68

2,595.01

49.18

63.98

479.63

3,187.80

1,341.68

1,284.61

742.23

210.09

71.92

3,650.53

6,838.33

12,778.01

218.49

5,582.12

5,800.61

89.52

5890.13

2,656.48

60.60

57.66

523.94

3,298.68

1,116.09

914.11

710.14

115.42

50.14

2,905.90

6,204.58

12,094.71

14

15

16

17

18

19A

16

20

17

21

18

3

EQUITY

Equity Share Capital

Other Equity

Equity attributable to equity holders of the parent

Non Controlling Interest

Total Equity

LIABILITIES

Non-Current Liabilities

(a) Financial Liabilities

(i) Borrowings

(ii) Other Financial Liabilities

(b) Provisions

(c) Deferred Tax Liabilities (Net)

Total Non-Current Liabilities

Current Liabilities

(a) Financial Liabilities

(i) Borrowings

(ii) Trade Payables

(iii) Other Financial Liabilities

(b) Other Current Liabilities

(c) Provisions

Total Current Liabilities

Total Liabilities

Total Equity and Liabilities

Significant Accounting Policies

EQUITY AND LIABILITIES

Non-Current Assets

(a) Property, Plant and Equipment

(b) Capital Work-in-Progress

(c) Goodwill on Consolidation

(d) Other Intangible Assets

(e) Financial Assets

(i) Investments

(ii) Loans

(iii) Others

(f) Other Non-Current Assets

Total Non-Current Assets

Current Assets

(a) Inventories

(b) Financial Assets

(i) Investments

(ii) Trade Receivables

(iii) Cash and Cash Equivalents

(iv) Bank Balances other than (iii) above

(v) Loans

(vi) Others

(c) Current Tax Assets (Net)

(d) Other Current Assets

Total Current Assets

Total Assets

6,922.11

265.15

335.21

168.42

960.87

0.64

22.52

40.35

8,715.27

1, 028.95

41.08

1,144.10

157.43

375.49

1.26

35.72

195.12

400.29

3,379.44

12,094.71


7,529.28

120.23 337.37

136.45

608.73

0.95

19.37

74.19

8,826.57

1,413.64

19.84

1,376.57

109.48

359.07

1.33

12.89

192.34

466.28

3,951.44

12,778.01

The accompanying notes are an integral part of the Financial Statements.


For JITENDRA K AGARWAL & ASSOCIATES For and on behalf of the Board,Chartered AccountantsFirm Registration No.318086E


ABHISHEK MOHTA

N. K. NOLKHA N. K. SETHIA Group Chief Financial Officer Company Secretary



(DIN:01097705) (DIN:00003792)PartnerMembership No. 066653



Consolidated Statement of Profit & LossstFor the year ended 31 March 2018

(Rs. in million)

22

23

24

25

5A, 5B

26

27

stAs at 31 March 2017 Notes

(0.65)

0.58

(26.03)

3.00

(23.10)

92.58

140.48

(24.80)

(23.10)

—

117.38

(24.80)

3.22

(5.20)

2.25

7.34

(0.81)

3.58

(233.36)

(147.75)

(89.19)

3.58

—

(144.17)

(89.19)

(3.38)

28A

28B

29

3

A (i) Items that will not be reclassified to Profit or Loss

(ii) Income-tax relating to items that will not be reclassified to Profit & Loss

B (i) Items that will be reclassified to Profit or Loss

(ii) Income-tax relating to items that will be reclassified to Profit & Loss

Other Comprehensive Income for the year, net of tax

Total Comprehensive Income for the Year

Profit/(Loss) attributable to

Owners of the Company

Non-Controlling Interest

Other Comprehensive Income attributable to



Total Comprehensive Income attributable to



Earning per Share (INR) - Basic & Diluted

Significant Accounting Policies

7,337.36

258.29

7,595.65

4,350.12

29.42

(64.37)

317.07

1,239.21

201.92

454.55

1,200.21

7,728.13

(132.48)

184.17

(316.65)

31.01

(14.99)

(99.87)

4.18

(0.04)

(236.94)


8,448.20

454.19

8,902.39

5,638.33

12.06

(40.61)

80.66

1,303.42

237.94

466.12

1,108.11

8,806.03

96.36

—

96.36

23.27

(21.17)

—

(21.42)

—

115.68

The accompanying notes are an integral part of the Financial Statements.


For JITENDRA K AGARWAL & ASSOCIATES For and on behalf of the Board,Chartered AccountantsFirm Registration No.318086E


ABHISHEK MOHTA




(DIN:01097705) (DIN:00003792)

PartnerMembership No. 066653

INCOME

Revenue from Operations

Other Income

Total Income

EXPENSES

Cost of Materials Consumed

Purchase of Stock-in-Trade

Change in Inventories of Finished Goods and Work-in-Progress

Excise Duty on Sale of Goods

Employee Benefit Expenses

Finance Costs

Depreciation and Amortisation Expenses

Other Expenses

Total Expenses

Profit/(Loss) before Exceptional Items and Tax

Exceptional Item

Profit/(Loss) before Tax

Tax Expenses:

Current Tax

MAT Credit Entitlement

MAT Credit Entitlement for earlier years

Deferred Tax

Tax for earlier years

Profit/(Loss) for the year

OTHER COMPREHENSIVE INCOME (OCI)



(B) Other Equity

Attributable to the equity holders of the parent

Reserves and Surplus Items of Other Comprehensive

Income

Foreign Currency

Translation Reserve

Total Non Controlling

Interest

Total

Capital Reserve


Capital Redemption

Reserve

Special Reserve

Retained Earnings

Equity Instruments

Debt Instruments

As at 31st March 2016 34.17 161.50 72.69 27.80 5,534.67 3.15 24.35 (48.16) 5,810.17 181.79 5,991.96

Profit for the year (147.75) (147.75) (89.19)

Other Comprehensive Income (4.26) 1.31 6.53 3.58

Total Comprehensive Income 34.17 161.50 72.69 27.80 5,382.66 4.46 30.88 (48.16) 5,666.00 92.60 5,758.60

Dividend (65.54) (65.54)

Dividend Distribution Tax (13.34) (13.34)

Transfer to Special Reserve 2.04 (2.04) _

Foreign Currency translation adjustment 186.63 (191.63) (5.00) (3.08)

stAs at 31 March 2017 34.17 161.50 72.69 29.84 5,488.37 4.46 30.88 (239.79) 5,582.12 89.52 5,671.64

Profit for the year 140.48 140.48 (24.80)

Other Comprehensive Income (0.86) 0.79 (23.03) (23.10)

Total Comprehensive Income 34.17 161.50 72.69 29.84 5,627.99 5.25 7.85 (239.79) 5,699.50 64.72 5,764.22

Dividend (65.54) (65.54)

Dividend Distribution Tax (13.34) (13.34)

Transfer to Special Reserve 1.83 (1.83) _

Foreign Currency translation adjustment (7.67) 47.85 40.18 (4.33)

stAs at 31 March 2018 34.17 161.50 72.69 31.67 5,539.61 5.25 7.85 (191.94) 5,660.80 60.39 5,721.19

(Rs. in million)



(A) Equity Share Capital


Balance at the beginning of the reporting

period

Changes during the

year

Balance at the end of the reporting

period

Balance at the beginning of the reporting

period

Changes during the

year

Balance at the end of the reporting

period

Equity Share Capital 218.47 — 218.47 218.47 — 218.47

Add : Forfeited Shares (amount paid up) 0.02 — 0.02 0.02 — 0.02

Total 218.49 — 218.49 218.49 — 218.49

Consolidated Statement of Changes in EquitystFor the year ended 31 March 2018

The accompanying notes are an integral part of the Financial Statements.As per our report of even date annexedFor JITENDRA K AGARWAL & ASSOCIATES For and on behalf of the Board,Chartered AccountantsFirm Registration No.318086E


ABHISHEK MOHTA




(DIN:01097705) (DIN:00003792)

PartnerMembership No. 066653

(Rs. in million)

Statement of Consolidated Cash FlowstFor the year ended 31 March 2018



Profit before Tax 96.36 (316.65)

Adjustments for:

Exceptional item — 184.17


Provision for bad & doubtful Debts & Advances (net) 1.01 (2.24)

Fair Value Loss on Foreign exchange forward contracts 1.24 10.20


Depreciation & Amortisation 466.12 454.55

(Profit)/Loss on Sale of Fixed Assets (Net) (26.53) 2.63

(Profit)/Loss on Sale of Investments as FVTPL/FVTOCI (Net) (42.72) (24.26)

Interest Income (60.80) (73.17)

Fair Value gain on Financial Instruments as FVTPL (Net) (16.59) (66.81)

Dividend Income (10.88) (14.40)

Liabilities written back (6.34) (2.97)

Unrealised Foreign Exchange (Gain)/Loss (Net) (115.88) 109.60

Operating Profit before Working Capital changes 539.39 466.84

Adjustments for:

(Increase)/ Decrease in trade and other Receivables (Net) (377.15) (273.60)

Inventories (384.69) (224.70)

Increase/ (Decrease) in Trade and other Payables (Net) 511.54 394.49

Cash generated from Operations 289.09 363.03

Income Tax (Paid)/Refund (net) (20.48) (62.63)

Net Cash from Operating activities 268.61 300.40

Purchase of Fixed Assets (771.03) (493.86)

Sale of Fixed Assets 44.72 15.91

Purchase of Investments (1,517.70) (1,584.59)

Sale of Investments 1,925.03 2,057.45

Fixed Deposit & Margin Money (net) 16.72 2.67

Interest received 89.69 53.03

Dividend received 6.06 14.40

Net Cash used in Investing Activities (206.51) 65.01

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds/(Repayment) of Borrowings (net) 232.15 (128.41)

Finance Costs paid (263.32) (182.44)

Net Cash used in Financing activities (110.05) (389.73)

Net Increase/(Decrease) in cash and cash equivalents (47.95) (24.32)

Cash and cash equivalents at the beginning of the year 157.43 181.75

Cash and cash equivalents at the end of the year (Note 12A) 109.48 157.43

Note:a. The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Indian Accounting Standard (Ind AS 7) - Statement of Cash Flow.b. The composition of Cash and Cash Equivalents have been determined based on the Accounting Policy No. 3(M).

As per our report annexed




ABHISHEK MOHTA



(DIN:01097705)



Dividend Paid (including Dividend Distribution Tax) (78.88) (78.88)

(Rs. in million)





1. Corporate Information

Kanoria Chemicals & Industries Limited (the Company or Parent Company) having its registered office at ‘Park Plaza’, 71 Park Street, Kolkata – 700 016,

India is a Public Limited Company incorporated and domiciled in India. The Equity Shares of the Company are listed on National Stock Exchange of India

Ltd. and BSE Ltd. The Consolidated Financial Statements (CFS) comprise financial statements of Kanoria Chemicals & Industries Ltd. and its subsidiaries

(collectively the Group) as at and for the year ended 31 March 2018. The Group is primarily engaged in manufacture of Industrial Chemicals, Electronic

Automotive and Textiles.

2. Basis of Preparation

A. Statement of Compliance

These Consolidated financial Statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) as per the Companies

(Indian Accounting Standards) Rules, 2015 (as amended) notified under Section 133 of Companies Act, 2013 (the Act) and other relevant provisions of

the Act.

These Consolidated financial Statements have been approved for issue by the Board of Directors on 18th May 2018.

B. Principles of Consolidation

The consolidated financial statements have been prepared on the following basis:

i. The financial statements of the Company and its subsidiaries are combined on a line by line basis by adding together like items of assets,

liabilities, equity, incomes, expenses and cash flows, after fully eliminating intra-group balances and intra-group transactions.

ii. Profits or losses resulting from intra-group transactions that are recognised in assets, such as inventory and property, plant & equipment, are

eliminated in full.

iii. In case of foreign subsidiaries, revenue items are consolidated at the average monthly rate prevailing during the year. All assets and liabilities

are converted at rates prevailing at the end of the year. Any exchange difference arising on consolidation is recognised in the Foreign Currency

Translation Reserve.

iv. Offset (eliminate) the carrying amount of the parent’s investment in each subsidiary and the parent’s portion of equity of each subsidiary.

v Non Controlling Interest’s share of profit/loss of consolidated subsidiaries for the year is identified and adjusted against the income of the

group in order to arrive at the net income attributable to shareholders of the Company.

vi. Non Controlling Interest’s share of net assets of consolidated subsidiaries is identified and presented in the Consolidated Balance Sheet

separate from liabilities and the equity of the Company’s shareholders.

C. Functional and Presentation Currency

These Consolidated financial Statements are presented in Indian Rupees (INR), which is also the Parent Company’s functional currency. All

amounts have been rounded off to the nearest two decimals of millions, unless otherwise indicated.

D. Historical Cost Convention

The Consolidated financial Statements have been prepared following accrual basis of accounting on a historical cost basis, except for the following

which are measured at fair value:

i. Certain financial assets and liabilities

ii. Property, plant & equipment

iii. Defined benefit plans

Notes to the Consolidated Financial Statements

E. Fair value measurement

A number of Group’s accounting policies and disclosures require fair value measurement for both financial and non-financial assets and liabilities.

All assets and liabilities for which fair value is measured or disclosed in the Consolidated financial Statements are categorised within the fair value

hierarchy, based on the lowest level input that is significant to the fair value measurement, as under:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the Consolidated financial Statements on a recurring basis, the Group determines whether transfers

have occurred between levels in the hierarchy by re-assessing categorisation, based on the lowest level input that is significant to the fair value

measurement, at the end of each reporting period.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value,

maximising the use of relevant observable inputs and minimising the use of unobservable inputs. External valuers are involved for valuation of

significant assets and liabilities. Involvement of external valuers is decided upon annually by the Management. Selection criteria include market

knowledge, reputation, independence and whether professional standards are maintained. The Management decides, after discussions with the

Group’s external valuers, which valuation techniques and inputs to use for each case.

At each reporting date, the Management analyses the movements in the values of assets and liabilities which are required to be re-measured or re-

assessed as per the Group's accounting policies.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and

risks of the asset or liability and the level of the fair value hierarchy as explained above.

F. Current Versus Non-Current Classification

The Group presents assets and liabilities in the balance sheet based on current/non-current classification.

An asset or liability is treated as current if it satisfies any of the following condition:

i. the asset/liability is expected to be realised/settled in normal operating cycle;

ii. the asset is intended for sale or consumption;

iii. the asset/liability is held primarily for the purpose of trading;

iv. the asset/liability is expected to be realised/settled within twelve months after the reporting period;

v. the asset is Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period;

vi. in the case of a liability, the Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period

All other assets and liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Group has identified twelve months as its operating cycle.

G. Use of Estimates and Judgements

In preparing these Consolidated financial Statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures including contingent liabilities. Actual results may differ from these estimates. Difference between actual results and estimates are recognised in the period prospectively in which the results are known/materialised.

Estimates and underlying assumptions are reviewed on an ongoing basis and are based on historical experience and other factors, including expectation of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

Detailed information about estimates and judgements is included in Note 4.






3. Significant Accounting Policy

A. Foreign Currency Transactions

Foreign currency transactions are translated into the functional currency of each Company in the Group, at the exchange rates on the date the

transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date.

Exchange difference arising on settlement or translation of monetary items are recognised in the Consolidated Statement of Profit and Loss on net basis.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates on the date of the initial

transaction.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates on the date when the fair value is determined.

The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the

change in fair value of the item i.e., translation differences on items whose fair value gain or loss is recognised in OCI or Consolidated Statement of Profit

and Loss are also recognised in OCI or Consolidated Statement of Profit and Loss, respectively.

B. Property, Plant & Equipment

i. Recognition & Measurement

All items of property, plant and equipment (PPE) are stated at cost less accumulated depreciation and accumulated impairment loss, if any.

Cost of an item of PPE includes its purchase cost, non refundable taxes and duties, directly attributable cost of bringing the item to its working

condition for its intended use and borrowing cost if the recognition criteria is met.

In case of self-constructed assets, cost includes the costs of all materials used in construction, direct labour, allocation of directly attributable

overheads, directly attributable borrowing costs incurred in bringing the item to working condition for its intended use. The costs of testing

whether the asset is functioning properly, after deducting the net proceeds from selling items produced while bringing the asset to that location

and condition, are also added to the cost of self-constructed assets. The Company considers a Project to be 'unit of measure' for construction

of a manufacturing plant rather than individual assets comprising the project in appropriate cases for the purpose of capitalisation of

expenditure incurred during construction period.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate component

of property, plant and equipment.

Subsequent costs are included in an item of PPE‘s carrying value or recognised as a separate item, as appropriate, only when it is probable

that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other

repairs and maintenance are charged to the Consolidated Statement of Profit and Loss during the reporting period in which they are incurred.

Major Inspection/ Repairs/ Overhauling expenses are recognized in the carrying amount of the item of property, plant and equipment as a

replacement if the recognition criteria are satisfied. Any Unamortized part of the previously recognized expenses of similar nature is

derecognized.

Capital work-in-progress is stated at cost which includes expenses incurred during construction period, interest on amount borrowed for

acquisition of qualifying assets and other expenses incurred in connection with project implementation in so far as such expenses relate to the

period prior to the commencement of commercial production.

An item of PPE or any significant part thereof is derecognised upon disposal or when no future economic benefits are expected from its use. Any

gain or loss on derecognition of an item of PPE is recognised in Consolidated Statement of Profit and Loss.

ii. Depreciation methods, estimated useful lives and residual value

Depreciation on all items of PPE is calculated using the straight line method to allocate their cost, net of their residual value, over their

estimated useful lives as prescribed in Schedule II to the Act and/or based on the local requirements in respect of foreign

subsidiaries.Depreciation on an item of PPE purchased/sold during the year is provided on pro-rata basis.Freehold land is not depreciated.


The residual values are not more than 5% of the cost of an item of PPE.

Depreciation methods, useful lives and residual values are reviewed at the end of each financial year and adjusted prospectively, if

appropriate.

C. Intangible Assets

Intangible assets acquired are initially measured at cost. Such intangible assets are subsequently measured at cost less accumulated amortisation

and accumulated impairment losses, if any.

Internally generated development expenditure is capitalised as part of the cost of the resulting intangible assets only if the expenditure can be measured

reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has

sufficient resources to complete development and to use or sell the asset. Otherwise it is recognised in the Consolidated Statement of Profit and Loss as

incurred. Subsequent to initial recognition, the asset is measured at cost less accumulated amortisation and any accumulated impairment losses

Goodwill is not amortised and is tested for impairment annually.

The Group amortises intangible assets with a finite useful life using the straight line method over the following periods:

Computer Software 3 years

Product Development 5 years

Amortisation methods and useful lives are reviewed at the end of each financial year and adjusted prospectively, if appropriate.

D. Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All

other leases are classified as operating leases.

In respect of assets taken on operating lease, lease rentals are recognized as an expense in the Consolidated Statement of Profit and Loss on straight

line basis over the lease term unless

i. another systematic basis is more representative of the time pattern in which the benefit is derived from the leased asset; or

ii. the payments to the lessor are structured to increase in the line with expected general inflation to compensate for the lessor’s expected

inflationary cost increases

Finance Leases, which effectively transfer to the lessee substantially all the risks and benefits incidental to ownership of the leased item, are

capitalized. Lease management fees, legal charges and other initial direct costs are capitalized.

If there is no reasonable certainty that the Company will obtain the ownership by the end of lease term, capitalized leased assets are depreciated over

the shorter of the estimated useful life of the asset or the lease term.

Leasehold land having perpetual rights are included in Property, plant and equipment.

E. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

I. Financial Assets


The Group recognizes a financial asset in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial

assets are recognized initially at fair value, plus in the case of financial assets not recorded at fair value through profit or loss (FVTPL), transaction

costs that are attributable to the acquisition of the financial asset.

Where the fair value of a financial asset at initial recognition is different from its transaction price, the difference between the fair value and the

transaction price is recognized as a gain or loss in the Consolidated Statement of Profit and Loss at initial recognition if the fair value is determined

through a quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from

observable markets (i.e. level 2 input).







price is deferred appropriately and recognized as a gain or loss in the Consolidated Statement of Profit and Loss only to the extent that such gain or

loss arises due to a change in factor that market participants take into account when pricing the financial asset.

However, trade receivables that do not contain a significant financing component are measured at transaction price.


For subsequent measurement, the Group classifies a financial asset in accordance with the below criteria:

a) The Group’s business model for managing the financial asset and

b) The contractual cash flow characteristics of the financial asset.

Based on the above criteria, the Group classifies its financial assets into the following categories:

i. Financial assets measured at amortized cost

ii. Financial assets measured at fair value through other comprehensive income (FVTOCI)

iii. Financial assets measured at fair value through profit or loss (FVTPL)

i. Financial assets measured at amortized cost:

A financial asset is measured at the amortized cost if both the following conditions are met:

a) The Group’s business model objective for managing the financial asset is to hold financial assets in order to collect contractual cash

flows, and

b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the


This category applies to certain investment in debt instruments, cash and bank balances, trade receivables, loans and other financial assets of the

Group (Refer Note 37 for further details). Such financial assets are subsequently measured at amortized cost using the effective interest method.

The amortized cost of a financial asset is also adjusted for loss allowance, if any.

ii. Financial assets measured at FVTOCI:

A financial asset is measured at FVTOCI if both of the following conditions are met:

a) The Group’s business model objective for managing the financial asset is achieved both by collecting contractual cash flows and selling the

financial assets, and

b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the


This category applies to certain investments in debt instruments (Refer Note 37 for further details). Such financial assets are subsequently

measured at fair value at each reporting date. Fair value changes are recognized in the Other Comprehensive Income (OCI). However, the Group

recognizes interest income and impairment losses and its reversals in the Consolidated Statement of Profit and Loss.

On Derecognition of such financial assets, cumulative gain or loss previously recognized in OCI is reclassified from equity to Consolidated Statement

of Profit and Loss.

Further, the Group, through an irrevocable election at initial recognition, has measured certain investments in equity instruments at FVTOCI (Refer

Note 37 for further details). The Group has made such election on an instrument by instrument basis. These equity instruments are not held for

trading. Pursuant to such irrevocable election, subsequent changes in the fair value of such equity instruments are recognized in OCI. However, the

Group recognizes dividend income from such instruments in the Consolidated Statement of Profit and Loss.

On Derecognition of such financial assets, cumulative gain or loss previously recognized in OCI is not reclassified from the equity to Consolidated

Statement of Profit and Loss. However, the Group may transfer such cumulative gain or loss into retained earnings within equity.


iii. Financial assets measured at FVTPL:

A financial asset is measured at FVTPL unless it is measured at amortized cost or at FVTOCI as explained above. This is a residual category applied

to all other investments of the Group excluding investments in subsidiary companies (Refer Note 37 for further details). Such financial assets are

subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Consolidated Statement of Profit and Loss.

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the

Group’s Balance Sheet) when any of the following occurs:

i. The contractual rights to cash flows from the financial asset expires;

ii The Group transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and

rewards of ownership of the financial asset;

iii. The Group retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material

delay to one or more recipients under a ‘pass-through’ arrangement (thereby substantially transferring all the risks and rewards of ownership

of the financial asset);

iv. The Group neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.

In cases where Group has neither transferred nor retained substantially all of the risks and rewards of the financial asset, but retains control of the

financial asset, the Group continues to recognize such financial asset to the extent of its continuing involvement in the financial asset. In that case,

the Group also recognizes an associated liability. The financial asset and the associated liability are measured on a basis that reflects the rights and

obligations that the Group has retained.

On Derecognition of a financial asset, (except as mentioned in ii above for financial assets measured at FVTOCI), the difference between the carrying

amount and the consideration received is recognized in the Consolidated Statement of Profit and Loss.

Impairment of financial assets:

The Group applies expected credit losses (ECL) model for measurement and recognition of loss allowance on the following:

i. Trade receivables

ii. Financial assets measured at amortized cost (other than trade receivables)

iii. Financial assets measured at fair value through other comprehensive income (FVTOCI)

In case of trade receivables, the Group follows a simplified approach wherein an amount equal to lifetime ECL is measured and recognized as

loss allowance.

In case of other assets (listed as ii and iii above), the Group determines if there has been a significant increase in credit risk of the financial

asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month ECL is measured

and recognized as loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime ECL is measured and

recognized as loss allowance.

Subsequently, if the credit quality of the financial asset improves such that there is no longer a significant increase in credit risk since initial recognition, the Group reverts to recognizing impairment loss allowance based on 12-month ECL.ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the Consolidated Statement of Profit and Loss under the head ‘Other expenses’.

II. Financial Liabilities


The Group recognises a financial liability in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial liabilities are recognised initially at fair value minus, in the case of financial liabilities not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial liability.

Where the fair value of a financial liability at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognised as a gain or loss in the Consolidated Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from observable markets (i.e. level 2 input).







price is deferred appropriately and recognised as a gain or loss in the Consolidated Statement of Profit and Loss only to the extent that such gain or

loss arises due to a change in factor that market participants take into account when pricing the financial liability.


All financial liabilities of the Group are subsequently measured at amortised cost using the effective interest method.

Derecognition:

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is

replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an

exchange or modification is treated as the Derecognition of the original liability and the recognition of a new liability. The difference between the

carrying amount of the financial liability derecognised and the consideration paid is recognised in the Consolidated Statement of Profit and Loss.

III. Derivative Financial Instruments

Derivative financial instruments viz. foreign exchange forward contracts, interest rate swaps and cross currency swaps to manage Company's

exposure to foreign exchange rate and interest rate risks are initially recognised at fair value at the date the derivative contracts are entered into and

are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss

immediately. The Company does not hold derivative financial instruments for speculative purposes.

F. Impairment

Assets that have an indefinite useful life are not subject to amortisation and are tested for impairment annually and whenever there is an indication that

the asset may be impaired.

Assets that are subject to depreciation and amortisation and assets representing investments in subsidiary companies are reviewed for impairment,

whenever events or changes in circumstances indicate that carrying amount may not be recoverable. Such circumstances include, though are not

limited to, significant or sustained decline in revenues or earnings and material adverse changes in the economic environment.

An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit (CGU) exceeds its recoverable amount. The

recoverable amount of an asset is the greater of its fair value less cost to sell and value in use. To calculate value in use, the estimated future cash flows

are discounted to their present value using a pre-tax discount rate that reflects current market rates and the risk specific to the asset. For an asset that

does not generate largely independent cash inflows, the recoverable amount is determined for the CGU to which the asset belongs. Fair value less cost

to sell is the best estimate of the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties,

less the cost of disposal.

Impairment losses, if any, are recognised in the Consolidated Statement of Profit and Loss and included in depreciation and amortisation expense.

Impairment losses are reversed in the Consolidated Statement of Profit and Loss only to the extent that the asset’s carrying amount does not exceed the

carrying amount that would have been determined if no impairment loss had previously been recognised.

G. Inventories

Inventories of raw materials, stores and spare parts, work in progress and finished goods are measured at lower of cost and net realisable value. However, materials and other items held for use in production of inventories are not written down below cost if the finished goods in which they will be used are expected to be sold at or above cost. In case of certain products, where cost cannot be ascertained reliably, the same are measured at net realisable value.

Cost of raw materials, stores and spares include its purchase cost and other costs incurred in bringing them to their present location and condition. Cost of work in progress and finished goods include direct materials, direct labour and appropriate proportion of variable and fixed overheads, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual item of inventory on FIFO/weighted average method, as appropriate.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.


H. Income Tax

Income Tax comprises current and deferred tax and is recognised in Consolidated Statement of Profit and Loss except to the extent that it relates to an

item recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or in equity

as the case may be.

i. Current Tax

Current tax comprises the expected tax payable on the taxable income for the year and any adjustments to the tax payable in respect of previous years. It

is measured using applicable tax rates and tax laws enacted or substantively enacted by the reporting date.

ii Deferred Tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes

and the corresponding amounts used for taxation purposes. Deferred tax asset is also recognised in respect of carried forward tax losses and unused

tax credits.

Deferred Tax assets are recognised to the extent that it is probable that future taxable amounts will be available to utilise those temporary differences,

carried forward tax losses and unused tax credits.

Deferred Tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the tax

laws that have been enacted or substantively enacted by the reporting date.

Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Group will pay normal

income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written

down to the extent there is no longer a convincing evidence to the effect that the Group will pay normal income tax during the specified period.

The Group offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognised amounts and where it

intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. In case of deferred tax assets and deferred tax

liabilities, the same are offset if the Group has a legally enforceable right to set off corresponding current tax assets against current tax liabilities and the

deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the Group.

I. Revenue Recognition

The Group recognises revenue when it is probable that future economic benefits will flow to the Group and the amount of revenue can be reliably

measured. Revenue is measured at the fair value of the consideration received or receivable.

The following specific recognition criteria must also be met for main revenue streams of the Group for its recognition:

i. Revenue from Sale of Goods

Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and includes

excise duty and net of returns, trade allowances, rebates, value added taxes and amounts collected on behalf of third parties.

ii. Renewable Energy Certificates (RECs)

RECs are recognised as accrued on the basis of notification issued by Central Electricity Regulatory Commission (CERC). Revenue from RECs is

measured on the basis of actual sale price on transfer of RECs and on the basis of CERC prescribed floor price for RECs held by/accrued to the Group

iii. Industrial Incentives

Government grants in the nature of industrial incentives to compensate the Group for expenses are recognised when there is a reasonable assurance

that the same will be received and are included in Consolidated Statement of Profit and Loss as other operating revenue.

iv. Interest Income

Interest income from debt instruments is recognised on accrual basis using effective interest rate method applicable on such debt instrument.

v. Dividend

Dividend income is recognised when the Group’s right to receive the payment is established, which is generally when the shareholders

approve the dividend.






J. Employee Benefits

i. Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and expensed as the relative service is provided. A liability is

recognised for the amount expected to be paid e.g. towards bonus, if the Group has a present legal or constructive obligation to pay this amount as a

result of past service provided by the employee, and the amount of obligation can be estimated reliably.

ii. Defined contribution plan

Provident Fund, a defined contribution plan, is a post employment benefit plan under which the Group pays contributions into a separate entity and has

no legal or constructive obligation to pay further amounts. The Group recognises the contributions payable towards the provident fund as an expense in

the Consolidated Statement of Profit and Loss in the periods during which the related services are rendered by employees

iii. Defined benefit plan

A defined benefit plan is a post employment benefit plan other than a defined contribution plan. The Group has unfunded Gratuity liability towards this

which is provided on the basis of actuarial valuation made by an external valuer at the end of each financial year using the projected unit credit method.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling (if any, excluding interest) are immediately recognised in the

balance sheet with corresponding debit or credit to Other Equity through OCI. Remeasurements are not classified to profit or loss in subsequent periods.

Net interest and changes in the present value of defined benefit obligation resulting from plan amendments or curtailments are recognised in

profit or loss

iv. Other long term employee benefits

The liabilities for earned leave are measured and provided on the basis of actuarial valuation made by an external valuer at the end of each financial

year using the projected unit credit method. Remeasurement gains or losses are recognised in Consolidated Statement of Profit and Loss in the period

in which they arise.

K. Borrowing Costs

Borrowing costs consists of interest and other costs incurred in connection with the borrowing of funds. Borrowing costs attributable to the acquisition

or construction of a qualifying asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised as part of the cost

of the asset. Income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the

borrowings costs eligible for capitalisation. All other borrowing costs are expensed in the period in which they are incurred. Transaction costs in respect

of long-term borrowings are amortised over the tenor of respective loans using effective interest method. Borrowing cost also includes exchange

differences to the extent regarded as an adjustment to the borrowing costs.

L. Earnings per Share

Basic earnings per share is calculated by dividing the net profit or loss before OCI for the year attributable to equity shareholders by the weighted

average number of equity shares outstanding during the period. Diluted earnings per share adjusts the figures used in determination of basic earnings

per share to take into account the post tax effect of finance costs associated with dilutive potential equity shares and the weighted average number of

additional equity shares that would have been outstanding assuming the issue of all dilutive potential equity shares.

M. Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and in hand and short term deposits with remaining maturity of 12 months or

less, which are subject to an insignificant risk of change in value.


N. Cash dividend to Equity shareholders

The Group recognises a liability to make distribution of cash dividend to equity shareholders of the Group when the distribution is approved by the

shareholders. A corresponding amount is recognised directly in equity.

O. Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of

resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Where the effect of time value of money is material, provisions are measured at present value using a pre-tax discount rate that reflects current market

assessment of the time value of money and risks specific to liability. The increase in the provision due to passage of time is recognised as interest

expense.

P. Contingent Liabilities and Assets

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one

or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow

of resources will be required to settle the obligation. The Group does not recognise a contingent liability but discloses its existence in the Consolidated

financial Statements. Contingent assets are not recognised in the Consolidated financial Statements.

Q. Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

R. Events after Reporting date

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such

events is adjusted within the Consolidated financial Statements. Otherwise, events after the Balance Sheet date of material size or nature are only

disclosed

S. Recent applicable Accounting pronouncements

Amendment to Ind AS issued but not yet effective

In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2018, notifying Ind AS

115, ‘Revenue from Contracts with Customers’. The amendment is applicable to the Company for the reporting period beginning April 1, 2018.

Ind AS 115 replaces existing revenue recognition standards Ind AS 11, Construction Contracts and Ind AS 18, Revenue and revised guidance note of the

ICAI on Accounting for Real Estate Transaction for Ind AS entities issued in 2016. The Group is evaluating the requirements of the amendment and the

effect on the financial statements is being evaluated.

4. Significant Accounting Judgements, Estimates and Assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported

amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty

about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities

affected in future periods.

i. Judgements

In the process of applying the accounting policies, management has made the following judgements, which have the most significant effect on the

amounts recognised in the financial statements






a. Equity Investments measured at FVTOCI

The company has exercised the option to measure investment in equity instruments, not held for trading at FVTOCI in accordance with Ind AS 109. It has

exercised this irrevocable option for its class of quoted equity shares. The option renders the equity instruments elected to be measured at FVTOCI non

recyclable to PL.

b. Business Model for Investment of Debt Instruments

For the purpose of measuring investments in debt instruments in accordance with Ind AS 109, the company has evaluated and determined that the

business model for investments in quoted debentures and bonds is to collect the contractual cash flows and sell the financial asset . Such financial

assets have been accordingly classified and measured at FVTOCI.

For the purpose of measuring investments in debt instruments in accordance with Ind AS 109, the company has evaluated and determined that the

business model for investments in unquoted debentures and bonds is only to collect the contractual cash flows . Such financial assets have been

accordingly classified and measured at amortised cost.

ii. Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing

a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its

assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about

future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes

are reflected in the assumptions when they occur.

a. Defined benefit plans

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. Further details about gratuity obligations are given in Note 32.

b. Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Refer Note 38 for further disclosures.

c. Depreciation/Amortisation and Useful Lives of Property, Plant and Equipment/Intangible Assets

Property, plant and equipment / intangible assets are depreciated / amortised over their estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Group’s historical experience with similar assets and take into account anticipated technological changes. The depreciation / amortisation for future periods is revised if there are significant changes from previous estimates.

d. Impairment of Financial Assets

The Group reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication of impairment. If

recoverable amount is less than its carrying amount, the impairment loss is accounted for.


e. Impairment of Non-Financial Assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the Group estimates

the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or Cash Generating Units (CGU’s) fair value less costs of

disposal and its value in use. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is

written down to its recoverable amount.

Determination of the recoverable amount involves management estimates on highly uncertain matters, such as commodity prices and their impact on

markets and prices for upgraded products, development in demand, inflation, operating expenses and tax and legal systems. The Group uses internal

business plans, quoted market prices and the Group’s best estimate of commodity prices, currency rates, discount rates and other relevant

information. A detailed forecast is developed for a period of three to five years with projections thereafter. The Group does not include a general growth

factor to volumes or cash flows for the purpose of impairment tests, however, cash flows are generally increased by expected inflation and market

recovery towards previously observed volumes is considered.

f. Taxes

The Group calculates income tax expense based on reported income. Deferred income tax expense is calculated based on the differences between the

carrying value of assets and liabilities for financial reporting purposes and their respective tax basis that are considered temporary in nature. Valuation

of deferred tax assets is dependent on management's assessment of future recoverability of the deferred benefit. Expected recoverability may result

from expected taxable income in the future, planned transactions or planned tax optimizing measures. Economic conditions may change and lead to a

different conclusion regarding recoverability.








As at 01.04.17

Additions Foreign Currency

Translation Adjustment

Sale/Disposal

As at 31.03.18

As at 01.04.17

For the Year

Foreign Currency


Sale/ Disposal

As at 31.03.18

As at 31.03.18


Freehold 738.89 — 8.85 — 747.74 — — — — — 747.74

Leasehold 1,068.95 — 0.86 — 1,069.81 29.34 14.66 0.05 — 44.05 1,025.76

Buildings 1,732.96 74.62 75.08 11.72 1,870.94 102.96 57.10 7.14 6.51 160.69 1,710.25

Plant & Equipment 3,970.67 767.39 116.95 2.41 4,852.60 577.13 298.13 57.34 0.16 932.44 3,920.16

Furniture & Fixtures 74.92 9.91 1.06 0.57 85.32 23.21 10.48 0.73 0.33 34.09 51.23

Vehicles & Fork Lifts 46.30 22.78 1.86 2.30 68.64 7.96 7.69 0.80 1.42 15.03 53.61

Office Equipment 100.54 5.69 9.23 14.41 101.05 70.52 10.94 6.32 7.26 80.52 20.53

Total 7,733.23 880.39 213.89 31.41 8,796.10 811.12 399.00 72.38 15.68 1,266.82 7,529.28


As at 01.04.16



Sale/Disposal

As at 31.03.17

As at 01.04.16

For the Year

Foreign Currency


Sale/ Disposal

As at 31.03.17

As at 31.03.17


Freehold 742.12 — (3.23) — 738.89 — — — — — 738.89

Leasehold 1,075.20 — (6.25) — 1,068.95 14.73 14.80 (0.19) — 29.34 1,039.61

Buildings 1,010.41 766.92 (42.76) 1.61 1,732.96 48.56 57.00 (2.38) 0.22 102.96 1,630.00

Plant & Equipment 2,066.27 2,008.01 (75.71) 27.90 3,970.67 335.06 277.07 (19.64) 15.36 577.13 3,393.54

Furniture & Fixtures 61.40 14.98 (0.74) 0.72 74.92 11.48 12.23 (0.33) 0.17 23.21 51.71

Vehicles & Fork Lifts 16.83 33.68 (0.87) 3.34 46.30 4.35 5.25 (0.30) 1.34 7.96 38.34

Office Equipment 103.30 19.08 (6.24) 15.60 100.54 67.46 21.90 (5.09) 13.75 70.52 30.02

Total 5,075.53 2,842.67 (135.80) 49.17 7,733.23 481.64 388.25 (27.93) 30.84 811.12 6,922.11

Gross Carrying Value Amortisation Net CarryingValue

As at 01.04.17



Sale/Disposal

As at 31.03.18

As at 01.04.17

For the Year

Foreign Currency


Sale/ Disposal

As at 31.03.18

As at 31.03.18

Goodwill 335.21 — 2.16 — 337.37 — — — — — 337.37

Computer Software 93.70 17.00 16.51 5.57 121.64 57.06 24.37 12.38 3.11 90.70 30.94

Product Development 356.43 10.69 19.01 — 386.13 224.65 42.75 13.22 — 280.62 105.51

Total 785.34 27.69 37.68 5.57 845.14 281.71 67.12 25.60 3.11 371.32 473.82

Gross Carrying Value Amortisation Net Carrying Value

As at 01.04.16



Sale/Disposal

As at 31.03.17

As at 01.04.16

For the Year

Foreign Currency


Sale/ Disposal

As at 31.03.17

As at 31.03.17

Goodwill 335.21 — — — 335.21 — — — — — 335.21

Computer Software 79.79 20.87 (5.63) 1.33 93.70 40.60 21.65 (4.07) 1.12 57.06 36.64

Product Development 348.44 31.78 (23.79) — 356.43 193.76 44.65 (13.76) — 224.65 131.78

Total 763.44 52.65 (29.42) 1.33 785.34 234.36 66.30 (17.83) 1.12 281.71 503.63

5A. Property Plant and Equipment(Rs. in million)

5B. Intangible Assets

6 : Investments

Face ValueRs.

Face ValueRs.




(A) Non Current Investments:

Investments at Fair Value through OCI

Equity Shares, Fully Paid (Quoted)

IFCI Ltd. 10 200 0.00 10 200 0.01

HDFC Bank Ltd. 2 2,500 4.72 2 2,500 3.61

Bank of India. 10 9,000 0.93 10 9,000 1.25

NMDC Limited. 1 8,000 0.95 1 8,000 1.06


Enviro Technology Ltd. 10 10,000 0.10 10 10,000 0.10

Bharuch Enviro Infrastructure Ltd. 10 1,400 0.01 10 1,400 0.01

Mittal Tower Premises Co-op. Society Ltd. 50 5 0.00 50 5 0.00

Narmada Clean Tech Limited 10 822,542 8.23 10 822,542 8.23

Woodlands Multispeciality Hospital Limited 10 2,180 0.02 10 2,180 0.02

Debenture/Bonds, Fully Paid (Quoted)

8.5% National Highway Authority of India — — — 1,000 100,000 117.95

8.68% National Housing Bank — — — 5,000 10,000 59.78

8.75% National Highway Authorities of India 1,000 40,000 49.93 1,000 40,000 49.00

Total Investments at Fair Value through OCI 64.89 241.02

Preference Shares, Fully Paid (Quoted)

16.06% Infrastructure Leasing & Financial Services Ltd. 7,500 4,000 58.00 7,500 4,000 57.63

Mutual Funds (Quoted)

HDFC FMP 3360 Days-Sr.30-Regular-Growth 10 5,000,000 65.19 10 5,000,000 61.54

ICICI Prudential Discovery Fund-Dividend Reinvest 10 363,701 10.47 10 1,814,767 52.53

ICICI Prudential Regular Income Fund 10 845,255 14.82 10 845,255 13.85

HDFC Midcap Opportunities Fund - Dividend Reinvest 10 412,969 12.83 10 412,969 12.61

Reliance Vision Fund-Dividend 10 90,879 3.75 10 90,879 3.83

Reliance Equity Opportunities Fund-Dividend Reinvest 10 99,095 2.80 10 99,095 2.91

Reliance Dynamic Bond Fund Growth 10 635,272 14.73 10 635,272 14.20

IDFC Dynamic Bond Fund -Growth 10 372,926 7.70 10 372,926 7.52

Franklin India Govt. Security Fund - Long - Growth 10 372,394 14.52 10 372,394 14.41

Franklin India Blue chip Fund-Dividend 10 262,533 10.13 10 262,533 10.45

Templeton India Growth Fund - Dividend 10 184,955 12.64 10 184,955 12.40

Alternative Investment Fund (Unquoted)

IIFL Real Estate Fund (Domestic) Sr.1 — — — 16 485,955 7.79



IIFL Income Opportunities Fund — — — 1 9,936,715 6.53

IIFL Income Opportunities Fund Series-Special Situations 5 4,776,976 34.59 8 4,776,976 45.89

IIFL Seed Venture Fund 10 2,279,590 35.99 10 1,663,948 23.62

ICICI Prudential Real Estate AIF-II 100 373,935 41.73 100 373,935 40.65

Chiratae Trust 100,000 75 6.63 100,000 40 3.25

Equity Fund (Unquoted)

IIFL Assets Revival Fund 2 10 4,523,997 63.51 10 4,523,997 59.68

IIFL National Development Agenda Fund — — — 8 4,922,035 61.62


Total Non Current Investments (A) 608.73 960.87


(Rs. in million)







Non- CurrentNon- Current Non- Current Current

Face ValueRs.

Face ValueRs.



(B) Current Investments:


Mutual Funds (Unquoted)

BSL Floating Rate Fund-STP-Growth — — — 100 142,507 30.82

Franklin India Ultra Short Bond Fund-Super Ins.-Growth 10 824,689 19.84 10 460,987 10.26


Total Current Investments (B) 19.84 41.08

(Rs. in million)

Aggregate book value of quoted investments 284.11 — 496.54 —

Aggregate market value of quoted investments 284.11 — 496.54 —

Aggregate value of unquoted investments 324.62 19.84 464.33 41.08

Current

7 : Loans




Other Loans

Loan to Employees 0.95 1.33 0.64 1.26

Loan to Others — — — —

Total Loans 0.95 1.33 0.64 1.26

8 : Other Financial Assets

9 : Other Assets

10 : Inventories

11 : Trade ReceivablesUnsecured, considered good 1,376.57 1,144.10

Doubtful 9.44 7.78

Less : Allowance for doubtful receivables 9.44 7.78

Total Trade Receivables 1,376.57 1,144.10

(a) Capital Advances 11.03 — 39.93 —

(b) Advances other than Capital Advances (i) Other Advances 63.16 70.40 0.42 65.85

(ii) Export Benefits and Claims Receivable — 118.94 — 123.62 (iii) Balance with Government Authorities — 276.94 — 210.82Total Other Assets 74.19 466.28 40.35 400.29


Security Deposits 19.37 2.24 22.52 1.00

Interest and Dividend Receivable — 10.65 — 34.72 Interest and Fees receivable from Related Parties — — — —

Total Other Financial Assets 19.37 12.89 22.52 35.72

(At lower of cost and net realisable value)

Raw Materials 878.49 630.02

Raw Materials in transit 80.45 —

Work-in-Progress 125.28 113.66

Finished Goods 242.46 229.28

Stores & Spare Parts 86.96 55.99

Total Inventories 1,413.64 1,028.95


(Rs. in million)





Vardhan Limited 26,190,872 130.95 26,133,872 130.67

(Rs. in million)



12A : Cash and Cash Equivalent

12B : Other Bank Balances



Balances with Banks

On Current Accounts 89.98 156.06

Remittance in Transit 16.70 —

Cash on hand 2.80 1.37

Total Cash and Cash equivalent 109.48 157.43

Earmarked balances with Banks (Unpaid Dividend Account) 5.64 5.34

Bank Deposits (held as security) 353.43 370.15

Total Other Bank Balances 359.07 375.49

13 : Current Tax AssetsIncome Tax Payments and Tax Deducted at Source less Provision 192.34 195.12

Total Current Tax Assets 192.34 195.12

14 : Equity Share Capital



(a) Authorised Share Capital


(b) Issued, Subscribed and Fully Paid


Add: Forfeited Shares (Amount paid up) 0.02 0.02

Total 218.49 218.49

(c) Terms/rights attached to Equity Shares

The Company has only one class of issued shares i.e. Equity Share having par value of Rs. 5 per share. Each holder of Equity Share is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.

(d) Shares held by holding company


(Rs. in million)

(Rs. in million)


15 : Other Equity

No. of SharesNo. of SharesName of the Shareholder % holding% holding

st31 March 2017

st31 March 2017

st31 March 2018

st31 March 2018

Vardhan Limited 26,190,872 59.94 26,133,872 59.81

R V Investment & Dealers Limited 3,210,120 7.35 3,210,120 7.35

(e) Details of shareholders holding more than 5% shares in the company

(f) Shares reserved for issue under options

No Shares have been reserved for issue under options and contracts/commitments for the sale of shares/disinvestment as at the Balance Sheet date.

(g) The Company, during the year 2012-13, had bought back 12,603,167 Equity Shares of Rs. 5 each.

(h) None of the securities are convertible into shares at the end of the reporting period.

(i) No calls are unpaid by any Director or Officer of the Company during the year.

Capital Reserve


Capital Redemption Reserve




Special Reserve


Add : Transfer from Retained Earnings 1.83 31.67 2.04 29.84

Retained Earnings

As per last Balance Sheet 5,488.37 5,534.67

Add : Profit for the year 140.48 (147.75)

Add : Actuarial gain/(loss) on defined benefit obligation (0.86) (4.26)

Add : Foreign Currency Translation adjustment (7.67) 186.63

Less : Transfer to Special Reserve (1.83) (2.04)

Less : Dividend (65.54) (65.54)

Less : Dividend Distribution Tax (13.34) 5,539.61 (13.34) 5,488.37

Foreign Currency Translation Reserve

As per last Balance Sheet (239.79) (48.16)

Add : Foreign Currency Translation adjustment 47.85 (191.94) (191.63) (239.79)

Other Comprehensive Income (OCI)


Add : Movement in OCI (Net) during the year (22.24) 13.10 7.84 35.34

Total Other Equity 5,660.80 5,582.12

(Rs. in million)

(Rs. in million)





16 : Borrowings

17 : Other Financial Liabilities

Non-Current

Non-Current

Non-Current

Non-Current

Current

Current

Current

Current

st31 March 2017

st31 March 2017

st31 March 2018

st31 March 2018

Secured

Term Loan 1 From Bank 2,595.01 462.50 2,314.43 303.67

Loans Repayable on Demand 2 From Banks 1,107.58 424.40

Buyer's Credit 2 From Banks 234.10 255.41

Unsecured

Term Loans

From Banks 342.05 90.80

Loans Repayable on Demand

From Banks 36.28

Commercial Papers 400.00

2,595.01 1,804.18 2,656.48 1,510.56

Amount Disclosed under Other Financial Liabilities (Refer Note 17) — (462.50) — (394.47)

Total Borrowings 2,595.01 1,341.68 2,656.48 1,116.09

Current Maturities of Long Term Debts (Refer Note 16) — 462.50 — 394.47

Interest Accrued — 41.97 — 53.23

Security Deposits — 5.94 — 5.13

Liabilities for Capital Goods — 19.06 — 69.95

Leasehold Land Obligations Payable 37.93 3.94 45.75 4.74

Unpaid Dividend — 5.65 — 5.34

Employee related liabilities — 58.01 — 61.85

Other liabilities 11.25 145.16 14.85 115.43

Total Other Financial Liabilities 49.18 742.23 60.60 710.14

1 Term Loan of Rs. 328.19 million secured by Fixed Deposits, of Rs. 1801.89 million secured by whole of the assets and properties of Kanoria Africa Textiles Plc, of Rs. 711.33 million secured by Land & Building of APAG Elektronik s.r.o., Czech Republic and Rs. 216.10 million secured by Plant & Machinery of APAG Elektronik s.r.o., Czech Republic

2 Loan of Rs. 683.48 million secured by hypothecation of Current Assets of the Company, of this Rs. 70.01 million additionally secured by movable fixed assets of Ankleshwar plant, Loan of Rs. 253.82 million secured by whole of the assets and properties of Kanoria Africa Textiles Plc, Ethiopia and Loan of Rs. 404.38 million secured by Inventories and Trade Receivables of APAG Elektronik s.r.o., Czech Republic


Less than 1 year 1 to 5 year Over 5 Year

Maturity Profile of Long Term Loans 462.50 1,423.99 1,171.02

(Rs. in million)

(Rs. in million)


18 : Provisions



Provision for Gratuity 63.98 10.85 57.66 10.08

Provision for Accrued Leave — 61.07 — 40.06

Total Provisions 63.98 71.92 57.66 50.14

(ìn million)st1 April 2016 st31 March 2017Profit & Loss

(Net)OCI (Net)



Fair Value of Investments 4.95 4.58 0.81 10.34

Others 1.35 (0.87) — 0.48

Deferred Tax Assets

MAT Credit Entitlement 18.90 114.85 — 133.75

Unabsorbed Business Losses/Depreciation — 3.16 — 3.16




19 : Income TaxA. Deferred Tax

The major components of deferred tax liabilities/assets arising on account of timing differences (net of foreign exchange fluctuation) are as follows:

(ìn million)st1 April 2017 st31 March 2018Profit & Loss

(Net)OCI (Net)



Fair Value of Investments 10.34 1.30 (3.12) 8.52

Others 0.48 (0.48) — —

Deferred Tax Assets

MAT Credit Entitlement 133.75 21.17 (0.27) 154.65

Unabsorbed Business Losses/Depreciation 3.16 68.24 — 71.40



Others — 0.25 — 0.25


B: Reconciliation of tax expense on the accounting profit for the year:


st31 March 2018

Profit before income tax 96.36 (316.65)

At India's statutory Income tax rate of 34.608% 33.35 (109.59)

Tax effect on non-deductible expenses 0.13 20.20

Effect of income exempt from tax (14.10) (31.17)

Effect of income taxed at special rate 1.56 (4.05)

Effect of loss on which no tax benefit available (40.26) 144.81

Tax expense for earlier years — (0.04)

MAT credit entitlement for earlier years — (99.87)

Tax expenses reported in the statement of profit and loss (19.32) (79.71)

(Rs. in million)






20 : Trade Payable

21 : Other Current Liabilities

23 : Other Income

(ìn million)

(ìn million)

(ìn million)

st31 March 2017

st31 March 2017

st31 March 2017

st31 March 2018

st31 March 2018

st31 March 2018

Trade Payable

Total outstanding dues of Micro and Small Enterprises — —

Total outstanding dues of creditors other than Micro and Small Enterprises 1,284.61 914.11

Total Trade Payables 1,284.61 914.11

Note : There are no Micro, Small & Medium Enterprises to whom the Group owes dues, which are outstanding for more than 45 days as at 31st March, 2018. This information required to be disclosed under the Micro, Small & Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

Statutory Liabilities 183.36 82.56

Customers' Credit Balances 26.73 32.86

Total Other Current Liabilities 210.09 115.42

Interest Income

On Investments 25.71 40.80

From Others 35.09 32.37

Dividend Income 10.88 14.40

Gain on Sale of Investments classified as FVTPL (Net) 10.83 18.97

Gain on sale of Debt Securities classified as FVTOCI 2.64 —

Gain on reclassification of FVTOCI Debt Securities 29.25 5.29

Fair value gain on Financial Instruments classified as FVTPL (Net) 16.59 66.81

Profit on Fixed Assets sold/discarded (Net) 26.53 —

Rent Income 2.14 1.65

Foreign Exchange Rate Fluctuation (Net) 280.50 48.09

Other Non Operating Income 14.03 29.91

Total Other Income 454.19 258.29

22 : Revenue from Operations(ìn million)


(a) Sale of Products

Manufactured products 8,351.61 7,151.66

Traded products 13.46 31.40

Total Sale 8,365.07 7,183.06

(b) Other Operating Revenues

Miscellaneous Sales 48.80 36.27

Renewal Energy Certificate benefits 9.57 93.12

Incentives 11.30 23.83

Others 13.46 1.08

Total Other Operating Revenues 83.13 154.30

Total Revenue from Operations (Refer note 33) 8,448.20 7,337.36

(Rs. in million)


24 : Employee Benefits Expense

26 : Other Expenses

(ìn million)

(ìn million)

st31 March 2017

st31 March 2017

st31 March 2018

st31 March 2018

Salaries, Wages, Bonus & Gratuity etc.

(including payments to Contractors) 1,095.83 1,036.41

Contribution to Provident Fund 158.65 137.66

Staff Welfare Expenses 48.94 65.14

Total Employee Benefits Expense 1,303.42 1,239.21

25 : Finance Costs


st31 March 2018

Interest expense 199.33 188.22

Exchange difference regarded as an adjustment to Borrowing Cost 26.15 —

Bank/Finance charges 12.46 13.70

Total Finance Cost 237.94 201.92

Consumption of Stores & Spare parts etc. 94.82 109.95

Other Manufacturing Expenses 95.38 207.82

Power & Fuel 311.92 284.42

Repairs to -

Plant & Machinery 49.32 51.00

Buildings 6.48 2.47

Others 16.11 14.83

Water Charges & Cess 20.64 19.29

Rates & Taxes 13.72 15.51

Rent 52.98 58.12

Insurance 26.08 22.08

Legal and Professional Charges 86.47 67.71

Miscellaneous Expenses 124.19 134.15

CSR Expenditure 1.82 2.31

Foreign Exchange Rate Fluctuation — 30.77

Commission & Brokerage to Others 20.28 14.41

Freight, Handling & Other Charges 91.73 72.22

Directors' Fees 1.64 1.54

Travelling Expenses 43.19 48.49

Charity & Donations 0.10 0.17

Sales Tax (net) 0.15 1.16

Directors' Remuneration 25.64 22.45

Provision for bad & doubtful Debts & Advances (net) 1.01 (2.24)


Loss on Fixed Assets sold/discarded (Net) — 2.63

Payment to Auditors 6.74 4.48

Fair Value Loss on Foreign Exchange Forward Contracts 1.24 10.20

Total Other Expenses 1,108.11 1,200.21

(Rs. in million)






(a) Statutory Auditors


For Certificates & Others 2.24 1.07


(b) Cost Auditors



Total payment to Auditors 6.74 4.48

Additional Information regarding Payment to Auditors

27 : Exceptional Itemst31 March 2017

st31 March 2018

Write down in the value of Renewable Energy Certificates on reduction in floor

price as notified by the Central Electricity Regulatory Commission — 184.17

28 : Other Comprehensive Income (OCI)

29 : Earnings per Share (EPS)st31 March 2017

st31 March 2018

Details for calculation of Basic and Diluted Earning per Share:

Profit after tax as per Statement of Profit and Loss 140.48 (147.75)

Weighted average number of equity share (Numbers) 43,693,333 43,693,333

Basic and diluted earning per share (Rs.) 3.22 (3.38)


A. Items that will not be reclassified to Profit or Loss(PL) -

1. Actuarial Gain/(Loss) on Defined Benefit Obligation (1.32) (6.51)

Current Tax 0.27 —

MAT Credit Entitlement (0.27) —


2. Net Gain/(Loss) on FVTOCI Equity Securities 0.67 1.31

Income Tax Effect 0.12 —

Net OCI not to be reclassified to PL (0.07) (2.95)

B. Items that will be reclassified to Profit or Loss (PL)-

1. Net Gain/(Loss) on FVTOCI debt securities 3.22 12.63

Income Tax Effect (0.37) (1.42)

2. (Gain)/Loss transferred to PL upon Recycling of FVTOCI debt Instruments (29.25) (5.29)


Net OCI to be reclassified to PL (23.03) 6.53



(Rs. in million)


30 : Commitments and Contingenciesst31 March 2017

st31 March 2018

31 : Distribution Proposed:st31 March 2017

st31 March 2018

Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognised as a liability st(including DDT thereon) as at 31 March 2018.

(i) Contingent Liabilities

(a) Claims/Disputed Liabilities not acknowledged as Debt

Excise Duty Demands (paid Rs. 6.54 million) 13.13 17.84

Sales Tax Demands (paid Rs. 0.43 million) 0.43 0.43

Income Tax Demands (paid Rs. 55.54 million) 55.54 55.54

Other Claims being disputed by the Company (paid Rs. 1.00 million) 5.56 4.19

(b) Outstanding Bank Guarantees 31.94 35.99

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and

not provided for 11.86 163.13

Advance paid 11.03 39.93

Uncalled Liability on Investments 15.50 28.00

Proposed dividends on Equity shares:

Final cash dividend for the year ended on 31 March 2018: INR 1.5 per share

(31 March 2017: INR 1.5 per share) 65.54 65.54

DDT on proposed dividend 13.47 13.34

79.01 78.88

(Rs. in million)





32 : Segment Information For management purposes, the Group is organised into business units based on its products and services and has following reportable segments:

I. Alco Chemicals II. Solar Power III. Electronic Automotive IV. Textile v. Others


st Year ended 31 March 2018

Business Segment Alco Chemicals

Solar Power

Electronic Automotive

Others Total TextileAlco

Chemicals Solar

PowerElectronic

AutomotiveOthers Total Textile

stYear ended 31 March 2017

Segment Revenue 3,331.98 5,116.22 8,448.20 3,124.13 4,213.23 7,337.36

Segment Assets 6,797.52 5,980.49 12,778.01 6,900.82 5,193.89 12,094.71

Segment Liabilities 2,160.86 4,677.47 6,838.33 2,011.82 4,192.76 6,204.58

Capital Expenditure 433.59 329.58 763.17 302.59 171.39 473.98

India IndiaRest of theWorld

Rest of the World

Total Total


(B) Secondary Segment information

Geographical Segment ====>

(C) Other Disclosures

Basis of pricing inter/Intra segment transfer and any change therein:At prevailing market-rate at the time of transfers.

Segment Accounting PoliciesThe accounting policies adopted for segment reporting are in line with the accounting policies of the Company and its subsidiaries.

(Rs. in million)

(Rs. in million)

Segment Revenue Revenue from opera�ons (Refer note no. 33) 3,422.90 45.24 4,152.10 827.96 - 8,448.20 3,146.79 126.92 3,614.55 449.10 - 7,337.36

Segment Result 65.25 (4.43) 150.33 36.81 10.89 258.85 165.20 68.33 18.83 (276.41) 19.19 (4.86)

Less: (i) Finance Cost 237.94 201.92

(ii) Excep�onal items - 184.17

(iii) Other Un-allocable expenditure net off Un-allocable income (75.45) (74.31)

Profit before Tax 96.36 ( 316.65)

Tax Expense ( 19.32) (79.71)

Net Profit: 115.68 (236.94)

Segment Assets 4,749.61 346.94 2,849.56 3,120.68 145.55 11,212.34 4,461.48 376.26 2,033.14 3,102.35 136.41 10,109.64

Un-allocable Corporate Assets 1,565.67 1,985.07

Total Assets: 12,778.01 12,094.71 Segment Liabili�es 567.48 8.94 2,280.14 2,389.95 - 5,246.51 389.00 5.08 1,696.96 2,495.80 - 4,586.84

Un-allocable Corporate Liabili�es 1,591.82 1,617.74

Total Liabili�es: 6,838.33 6,204.58

Other DiclosuresCapital Expenditure 429.06 - 283.24 46.34 - 758.64 294.16 0.06 143.61 27.78 - 465.61

Un-allocable Capital Expenditure 4.53 8.37

Total Capital Expenditure: 763.17 473.98 Deprecia�on & Amor�za�on 168.79 34.08 165.41 88.83 - 457.11 154.43 41.18 158.67 91.56 - 445.84

Un-allocable Deprecia�on 9.01 8.71

Total Deprecia�on & Amor�za�on: 466.12 454.55


34 : Disclosures as required under Indian Accounting Standard 19 on "Employee Benefits"

A. Defined Benefit Plan

The Company has unfunded scheme for payment of gratuity to all eligible employees calculated at specified number of days of last drawn salary depending upon tenure of service for each year of completed service subject to minimum five years of service payable at the time of separation upon superannuation or on exit otherwise. Subsidiaries are not having defined benefit plan scheme for its employees.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Post - retirement benefit plans as relates to parent only.


1. Change in the Present Value of Obligation

- Present Value of Obligation as at the beginning 67.74 58.10






- Benefits paid (3.41) (5.03)

- Present Value of Obligation as at the end 74.83 67.74

2. Expenses recognised in the Statement of Profit & Loss



Total 9.18 8.17

3. Other Comprehensive Income




Total 1.32 6.50

4. Actuarial Assumptions

(a) Financial Assumptions

Discount rate (per annum) 7.60% 7.40%

Salary growth rate (per annum) 7.00% 7.00%

(b) Demographic Assumptions

Mortality rate (% of IALM 06-08) 100.00% 100.00%

Attrition/Withdrawal rates, based on age: (per annum)

up to 44 years 2.00% 2.00%

above 44 years 1.00% 1.00%

Gratuity

Type of products included in each reported business segment:

Alco Chemicals business includes Pentaerythritol, Sodium Formate, Acetaldehyde, Formaldehyde & Hexamine etc., Solar Power business includes Power generation from Solar energy, Textile business includes yarn & denim manufacturing, Electronic Automotive business includes electronic & mechatronic modules etc and others includes Financial Activities & others.

33 : Consequent to the introduction of Goods and Service Tax (GST) with effect from 1st July 2017, Central Excise, Value Added Tax (VAT) etc. have been subsumed into GST. In accordance with Indian Accounting Standard - 18 on Revenue and Schedule III of the Companies Act, 2013, unlike Excise duties, levies like GST, VAT etc. are not part of Revenue. Accordingly, the figures of Revenue from Operation and Segment Revenue of Alco Chemicals for the Year ended 31st March, 2018 are not comparable with the previous year.

(Rs. in million)st31 March 2018

Gratuity





5. Sensitivity Analysis

The Sensitivity Analysis below has been determined based on reasonably possible change of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. These sensitivities show the hypothetical impact of a change in each of the listed assumptions in isolation. While each of these sensitivities holds all other assumptions constant, in practice such assumptions rarely change in isolation. For presenting the sensitivities, the present value of the Defined Benefit Obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the Defined Benefit Obligation presented above. There was no change in the methods and assumptions used in the preparation of the Sensitivity Analysis from previous year.

The impact of Sensitivity analysis on Defined Benefit Plan is given below:


Discount rate increase by 1% (70.99) (64.30)

Discount rate decrease by 1% 79.15 71.65

Salary Growth rate increase by 1% 79.13 71.63

Salary Growth rate decrease by 1% (70.94) (64.25)

Weighted average duration (based on discounted cash flow) 5 Years

Expected cash flow over the next (valued on undiscounted basis)

1 year 10.85

2 to 5 year 43.69

6 to 10 year 26.57

More than 10 year 46.74

Particulars

6. Maturity Profile of Defined Benefit Obligation

7. In respect of Provident Fund in the nature of defined benefit plans contribution amounting to Rs. 2.92 million (Previous year Rs. 2.55 million) and the accrued past service liability of Rs. Nil (Previous year Rs. Nil) as valued by the actuary using Projected Unit Credit Method is recognised as expenses and included in "Employee Benefits Expense".

8. Description of Risk ExposuresValuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:

Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise due to non availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts.

B. Defined Contribution PlanThe Group contributes certain percentage of salary for all eligible employees towards Provident Fund managed either by approved trusts or by the Government and debit the same to statement of Profit and Loss. The provident fund set up by the employers, require interest shortfall to be met by the employers. The fund set up by the Company does not have existing deficit of interest shortfall. The amount debited to Statement of Profit and Loss towards Provident Fund contribution during the year was Rs. 158.65 million (previous year Rs. 137.66 million).


(Rs. in million)

35. The list of subsidiaries which are included in the Consolidated Financial Statements of the Kanoria Chemicals & Industries Limited and its effective ownership interest therein are as under:

Ownership InterestRelationship

2017-2018

Country of Incorporation 2016-2017

Pipri Limited Subsidiary India 100.00% 100.00%

Kanoria Africa Textiles PLC Subsidiary Ethiopia 78.68% 78.68%

APAG Holding AG Subsidiary Switzerland 100.00% 100.00%

Name of the Company

For the purpose of consolidation, the consolidated financial statements of APAG Holding AG reflecting consolidation of following entities as atst31 March, 2018 prepared in accordance with Swiss Standard on the Limited Review (PS 910) have been restated, where considered material, to comply with

Generally Accepted Accounting Principles in India. Disclosures in respect of these foreign subsidiaries are given to the extent of available information.

Ownership InterestRelationship

2017-2018

Country of Incorporation 2016-2017

APAG Elektronik AG Subsidiary Switzerland 100% 100%

APAG Elektronik s.r.o. Subsidiary Czech Republic 100% 100%

CoSyst Control Systems GmbH Subsidiary Germany 100% 100%

APAG Elektronik LLC Subsidiary US 100% 100%

APAG Elektronik S. De R.L. De C.V. (up to 4th March, 2018) Subsidiary Mexico 100% 100%

APAG Services S. De R.L. De C.V. (up to 4th March, 2018) Subsidiary Mexico 100% 100%

APAG Elektronik Corp. (w.e.f.13th February, 2018) Subsidiary Canada 100% —

Name of the Company

36. Additional Information, as required under Schedule III to the Companies Act, 2013, of enterprises consolidated as Subsidiaries.


ParentKanoria Chemicals & Industries Limited 75.15% 4,463.88 5.89% 6.81 -103.18% (23.84) -18.39% (17.03)

SubsidiariesIndianPipri Limited 2.96% 175.65 9.89% 11.44 3.18% 0.73 13.16% 12.18

ForeignKanoria Africa Textiles PLC 11.29% 670.34 -52.34% (60.54) — — -65.40% (60.54)

APAG Holding AG (Consolidated) 9.59% 569.42 158.00% 182.77 — — 197.43% 182.77

Minority interest in all subsidiaries 1.02% 60.39 -21.44% (24.80) — — -26.79% (24.80)

Name of the Enterprises

2017-18

Net assets i.e. Total assets minus total liabilities

2017-18 2017-18 2017-18

Share in profit or loss Share in Other Comprehensive Income

Share in total Comprehensive Income

As % of Total Comprehensive

Income

As % of consolidated

net assets

Amount Rs in millions




As % of consolidated profit or loss


other comphrehensive

Income





ParentKanoria Chemicals & Industries Limited 79.18% 4,663.64 62.50% 148.09 41.69% 1.49 64.10% 149.58

SubsidiariesIndianPipri Limited 2.78% 163.47 7.93% 18.79 58.31% 2.09 8.94% 20.87

ForeignKanoria Africa Textiles PLC 10.82% 637.33 -129.65% (307.20) — — -131.64% (307.20)

APAG Holding AG (Consolidated) 5.71% 336.18 -3.13% (7.42) — — -3.18% (7.42)

Minority interest in all subsidiaries 1.52% 89.52 -37.64% (89.19) — — -38.22% (89.19)

Name of the Enterprises

2016-17

Net assets i.e. Total assets minus total liabilities

2016-17 2016-17 2016-17

Share in profit or loss Share in Other Comprehensive Income

As % of Total Comprehensive

Income


net assets

Amount Rs. in millions




As % of consolidated profit or loss


other comphrehensive

Income


Share in Total Comprehensive Income

38 : Fair Value Measurements of Financial Instruments

Fair value hierarchy as atst31 March 2018


inputs(Level 2)


inputs(Level 3)

Quoted prices in


Financial assets/financial liabilities

Non-Current Current


ReferNote

Financial Assets


Trade Receivables 11 — — 1,376.57 1,144.10

Cash and cash equivalents 12A — — 109.48 157.43

Other Bank balances 12B 359.07 375.49

Loans 7 0.95 0.64 1.33 1.26

Other Financial Assets 8 19.37 22.52 12.89 35.72


Investments 6A & B 543.84 719.85 19.84 41.08

Measured at fair value through other comprehensive income

Investments 6A 64.89 241.02 — —

Total Financial Assets 629.05 984.03 1,879.18 1,755.08

Financial Liabilities


Borrowings 16 2,595.01 2,656.48 1,341.68 1,116.09

Trade Payables 20 — — 1,284.61 914.11




Total Financial Liabilities 2,644.19 2,717.08 3,368.52 2,740.34

37 : Category-wise classification of Financial Instruments


The following table provides fair value measurement hierarchy of the Group's financial assets and liabilities:

(Rs. in million)

(Rs. in million)

Fair value hierarchy as atst31 March 2017

Financial assets measured at fair value through profit or loss

Quoted Preference shares 58.00 — — 57.63 — — Quoted Mutual funds 169.58 — — 206.25 — —

Unquoted Mutual funds — 19.84 — — 41.08 —

Unquoted Alternate Investment funds — 252.75 — — 334.66 —

Unquoted Equity funds — 63.51 — — 121.30 —

Financial assets measured at fair value through other


Quoted Equity Shares 6.60 — — 5.93 — —

Unquoted Equity Shares — — 8.36 — — 8.36

Quoted Debentures/Bonds 49.93 — — 226.73 — —

Financial liabilities measured at fair value through profit or loss

Forward Exchange contract (Net) 17.29 — — 17.88 — —


inputs(Level 2)


inputs(Level 3)

Quoted prices in


Financial Instruments measured at amortised cost

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair value since the Group does not anticipate that the carrying amounts would be significantly different from the values that would eventually bereceived or settled.






39 : Financial Risk Management - Objectives and PoliciesThe Group’s principal financial liabilities comprise borrowings, trade payables, other financial liabilities and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Group’s operations. The Group’s financial assets include investments, trade receivables, cash and cash equivalents, other bank balances and loans.

The Group is exposed to market risk and credit risk. The Group has a Risk management policy and its management is supported by a Risk management committee that advises on risks and the appropriate risk governance framework for the Group. The Risk management committee provides assurance to the Group’s management that the Group’s risk activities are governed by appropriate policies and procedures and that risks are identified, measured and managed in accordance with the Group’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

(i) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and other price risk, such as commodity price risk and equity price risk. Financial instruments affected by market risk include FVTOCI investments, FVTPL investments, trade payables, trade receivables, etc.

(a) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a foreign currency exposure will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities. The Group monitors the foreign exchange fluctuations on continuous basis and advises the management of any material adverse effect on the Group and for taking risk mitigation measures. The Group enters into forward exchange contracts against its foreign currency exposure relating to recognised underlying liabilities and firm commitments. The Group does not enter into any derivative instruments for trading or speculative purposes.

Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in USD, Euro and SGD exchange rates, with all other variables held constant. The impact on the Group’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Group’s exposure to foreign currency changes for all other currencies is not material.

Total hedged foreign currency payable (net)- USD 0.83 million equivalent to Rs. 54.20 million (Previous year USD 1.00 million equivalent to Rs. 64.84 million).

Foreign Currency Receivable/ (Payable) (Net) 3.41 222.12 2.55 205.69 (12.00) (7.38) 5.27 341.85 2.67 184.77 (2.12) (98.21)

Depreciation in Indian Rupees 5% 5% 5% 5% 5% 5%

Effect on Profit before Tax 11.11 10.28 (0.37) 17.09 9.24 (4.91)

Appreciation in Indian Rupees 5% 5% 5% 5% 5% 5%

Effect on Profit before Tax (11.11) (10.28) 0.37 (17.09) (9.24) 4.91


USD USDINR INREURO EUROINR INRJPY SGDINR INR

(Rs. in million)


(ìn million)st31 March 2018 st31 March 2017

Consumption of Methanol 1,807.21 1,395.35

Price change +5% -5% +5% -5%

Effect on Profit before Tax (90.36) 90.36 (69.77) 69.77

(b) Commodity price risks

The Group is affected by the price volatility of methanol, one of its major raw material. Its operating activities require a continuous supply of methanol. The Group monitors price and demand/supply situation on continuous basis and advises the management of any material adverse effect on the Group and for taking risk mitigation measures.

Commodity price sensitivity

The following table shows the effect of price changes in Methanol on Profit before Tax, with all other variable held constant:

(ii) Credit risks

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables).

Trade receivables

An impairment analysis is performed at each reporting date on an individual basis for all the customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on credit losses historical data. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed as the Group does not hold collateral as security. The Group has evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries.

(c) Equity price risks

The Group’s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group manages the equity price risk through diversification and by placing limits on individual and total equity instruments/mutual funds. Reports on the investment portfolio are submitted to the Group’s management on a regular basis.

Equity price sensitivity

The following table shows the effect of price changes in quoted and unquoted equity shares (other than that in subsidiaries), quoted preference shares, quoted and unquoted equity mutual funds, unquoted alternative investment funds and unquoted equity funds.

(ìn million)st31 March 2018 st31 March 2017

(Rs. in million)

(Rs. in million)

(iii) Liquidity risk

Liquidity risk is the risk that Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company's exposure to liquidity risk arises primarily from mismatches of the maturities of financial asset and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.

The table below analysis financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amount disclosed in the table are the contractual undiscounted cash flow.

Investment 429.20 610.22

Price change +5% -5% +5% -5%

Effect on Profit before Tax 21.46 (21.46) 30.51 (30.51)





The Group's objective when managing capital (defined as net debt and equity) are to safeguard the Group's ability to continue as a going concern in order to provide returns to shareholders and benefit for other stakeholders, while protecting and strengthening the balance sheet through the appropriate balance of debt and equity funding. The Group manages its capital structure and makes adjustments to it, in light of changes to economic conditions and strategic objectives of the Group. The Group's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

40 : Capital Management


As at 31st March, 2018Borrowings (refer note 16) 1,804.18 1,423.99 1,171.02 4,399.19 4,399.19

Trade payable (refer note 20) 1,284.61 — — 1,284.61 1,284.61

Other financial liabilities (refer note 17) 279.74 27.04 118.41 425.19 328.91

As at 31st March, 2017 Borrowings (refer note 16) 1,510.72 1,797.45 859.05 4,167.22 4,167.04

Trade payable (refer note 20) 914.11 — — 914.11 914.11

Other financial liabilities (refer note 17) 315.68 33.82 147.08 496.58 376.27

1 to 5 years Over 5 yearsLess than 1 year

Carrying value

Total

(Rs. in million)

Relationship Name of the Related Parties

Holding Company

Key Management Personnel (KMP)

Relative of KMP

Enterprise over which KMP exercises significant influence

Post Employment Benefit Plan entity

1. Vardhan Limited

2. Mr. R. V. Kanoria - Chairman & Managing Director

3. Mr. S. V. Kanoria - Whole Time Director

4. Mr. Amitav Kothari - Director

5. Mr. H.K. Khaitan - Director

6. Mr. Ravinder Nath - Director

7. Mr. G. Parthasarathy - Director

8. Mr. S. L. Rao - Director

9. Mr. A. Vellayan - Director

10. Mrs. M. Kanoria - Director

11. Mr. A. V. Kanoria

12. Mrs. V. Kanoria

13. KPL International Limited

14. Kanoria Employees' Provident Fund Trust

41 : Related Party Disclosures: (i) List of related parties and relatives with whom transaction taken place:


2017-18


Dividend Paid

Vardhan Limited 39.29 — — — 39.20 — — —

Mr. R. V. Kanoria — 0.69 — — — 0.65 — —

Mr. S. V. Kanoria — 0.83 — — — 0.83 — —

Mr. A. Vellayan — 0.02 — — — 0.02 — —

Mrs. M. Kanoria — 0.75 — — — 0.75 — —

Mr. A. V. Kanoria — 0.65 — — — 0.65 — —

Directors' Fees

Mr. Amitav Kothari — 0.29 — — — 0.29 — —

Mr. H.K. Khaitan — 0.36 — — — 0.32 — —

Mr. Ravinder Nath — 0.19 — — — 0.17 — —

Mr. G. Parthasarathy — 0.26 — — — 0.17 — —

Mr. S. L. Rao — 0.18 — — — 0.16 — —

Mr. A. Vellayan — 0.10 — — — 0.05 — —

Mrs. M. Kanoria — 0.21 — — — 0.21 — —

Remuneration

Mr. R. V. Kanoria — 18.08 — — — 14.70 — —

Mr. S. V. Kanoria — 7.56 — — — 5.16 — —

Mr. T. D. Bahety — — — — — 2.59 — —

Mrs. V. Kanoria — 2.92 — — — 2.66 — —

Mr. A. V. Kanoria — 18.26 — — — 12.48 — —

Purchases of Raw Material KPL International Limited — — 156.38 — — — 65.74 —Purchases of Fixed Assets KPL International Limited — — 78.02 — — — 6.77 —Commission Paid KPL International Limited — — 2.06 — — — 2.43 —Rent received KPL International Limited — — 0.60 — — — 0.58 —Contribution during the year (includes Employees' share and contribution) Kanoria Employees' Provident Fund Trust — — — 6.59 — — — 5.76Balances as at 31st MarchRemuneration Mrs. V. Kanoria — 0.29 — — — 0.26 — —Creditor KPL International Limited — — 39.90 — — — 30.39 —

2016-17

Holding Company

KMP/ Relative of

KMP


KMP exercises


Post Employment

BenefitPlan entity

Holding Company

KMP/ Relative of

KMP


KMP exercises


Post Employment

BenefitPlan entity

As per our report of even date annexed For JITENDRA K AGARWAL & ASSOCIATESChartered AccountantsFirm Registration No.318086E



(DIN:01097705)


(DIN:00003792)



ABHISHEK MOTHAPartnerMembership No. 066653


42. Figures for the previous year have been regrouped/rearranged, wherever found necessary.

Signature to Note 1 to 42

(ii) Transaction with related parties: (Rs. in million)





Country of incorporation India Ethiopia Switzerland

The Date since when subsidiary was acquired 21.09.1978 23.07.2012 02.05.2012

Investments Textile Electronic Principal Business Activities

Automotive

Reporting Currency INR USD CHF

Exchange Rate as on 31.3.2018 Rs. 65.0441 Rs. 68.2932

(a) Equity Share Capital 46.51 936.63 20.49

(b) Other Equity 129.14 (653.32) 65.32

(c) Total Assets 176.53 3,120.68 2,878.18

(d) Total Liabilities 0.88 2,837.37 2,792.37

(e) Investments* 175.10 — —

(f) Turnover 11.11 827.96 4,152.10

(g) Profit/(Loss) before Taxation 10.89 (116.34) 119.41

(h) Provision for Taxation (0.55) — (45.17)

(i) Profit/(Loss) after Taxation 11.44 (116.34) 164.58

(j) Other comprehensive income for the year, net of tax 0.73 — —

(k) Total comprehensive income for the year 12.17 (116.34) 164.58

(l) Proposed Dividend — — —

(m) % of Shareholding 100.00% 78.68% 100.00%



(DIN:01097705)


(DIN:00003792)




Kanoria Africa Textiles Plc

APAG Holding AG (Consolidated)

Pipri LimitedName of Subsidiaries

* Excluding Investment in Subsidiaries

PART "B" : Associates/Joint Ventures - Not Applicable

Name of subsidiaries which have been liquidated during the year:1. APAG Elektronik S. De. R.L. De C.V. (Subsidiary of APAG Holding AG)2. APAG Services S. De. R.L. De C.V. (Subsidiary of APAG Holding AG)

FORM AOC-1: Statement containing Salient Features of Financial Statements of Subsidiary/Associates/Joint Ventures for the year ended 31st March, 2018, pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014


(Rs. in million)PART “A” : Subsidiaries

Registered OfficeKanoria Chemicals & Industries Limited'Park Plaza' , 71 Park Street, Kolkata - 700 016Tel: +91-33-22499472, 22499473, 22499474Fax: +91-33-22499466Email: [email protected]

KCI

CIN: L24110WB1960PLC024910thRegistered Ofce: “Park Plaza”, South Block, 7 Floor, 71, Park Street, Kolkata – 700 016

Phone: (033) 4031 3200, Fax: (033) 4031 3220Email: [email protected], Website: www.kanoriachem.com

NOTICE is hereby given that the Fifty Eighth Annual General Meeting of the Members of Kanoria Chemicals & Industries Limited will be held at Shripati Singhania Hall in Rotary Sadan, 94/2, Chowringhee Road, Kolkata - 700 020 (near to Nehru Children Museum), on Thursday, the

th13 September 2018 at 3.00 P. M. for the transaction of the following business(es):


Kanoria ChemicalsIndustries Limited&

Notice to the Shareholders

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Financial Statements (including the Consolidated Financial Statements) of the Company for the stnancial year ended 31 March 2018 and the Reports of the Board of Directors and Auditors thereon.

st2. To declare Dividend on Equity Shares for the nancial year ended 31 March 2018.

3. To appoint a Director in place of Shri S.V. Kanoria (DIN: 02097441), who retires by rotation and being eligible, offers himself

for re-appointment.

SPECIAL BUSINESS

To consider and, if thought t, to pass, with or without modication(s), the following resolutions:

4. As an Ordinary Resolution

“RESOLVED that pursuant to Sections 149, 150, 152, read with Schedule IV and other applicable provisions, if any, of the Companies Act,

2013 (“Act”), the Companies (Appointment and Qualication of Directors) Rules, 2014 and the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 ( “the Listing Regulations”) (including any statutory modication(s) or re-enactment thereof for the time

being in force), Shri Sidharth Kumar Birla (DIN: 00004213), who was appointed as an Additional Director of the Company with effect fromth18 May, 2018 by the Board of Directors in terms of Section 161 of the Act and holds ofce up to the date of the 58th Annual General Meeting of

the Company and, who has submitted declaration that he meets the criteria for independence as provided in Section 149 of the Act and the

Listing Regulations and is eligible for appointment, be and is hereby appointed as an Independent Director of the Company, not liable to retire thby rotation, for a period of 5 consecutive years with effect from 18 May, 2018.”

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5. As a Special Resolution

“RESOLVED that pursuant to Sections 196, 197, 203 read with Schedule V and other applicable provisions, if any, of the Companies Act,

2013 (hereinafter referred to as the "Act"), the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the SEBI

(Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any statutory modication(s) or re-enactment thereof, for

the time being in force), the Articles of Association of the Company, and on the recommendation of the Nomination and Remuneration

Committee and the approval of the Board of Directors, consent of the Company be and is hereby accorded to the re-appointment of Shri R.V. thKanoria (DIN 00003792) as the Managing Director of the Company, for a period of further three years with effect from 10 January, 2018, on

the terms and conditions including remuneration as recommended by the Nomination and Remuneration Committee at its Meeting held on th th14 November, 2017 and as set out in the Agreement dated 16 December 2017, entered into between the Company and Shri R.V. Kanoria,

Managing Director, more explicitly set out in the explanatory statement, with authority to the Board of Directors to alter and vary the terms and

conditions of the said appointment and/or remuneration, from time to time, during his tenure of appointment in such manner as may be

agreed to between the Board of Directors and Shri R.V. Kanoria, subject to the same being in accordance and within the limits specied in

Schedule V and other applicable provisions of the Companies Act, 2013, or any statutory modication(s) or re-enactment thereof as may be

applicable at the relevant time.”

“RESOLVED FURTHER that in the event of no prots or inadequacy of prots in any nancial year during the currency of tenure of ofce of Shri

R.V. Kanoria, the Company will pay him, in respect of such nancial year, minimum remuneration subject to the limits specied in Schedule V

to the Companies Act, 2013 or any statutory modication(s) or re-enactment thereof as may be applicable at the relevant time.”

“RESOLVED FURTHER that the Board of Directors be and is hereby authorised to do and perform all such acts, deeds, matters and things as

may be considered necessary, desirable or expedient to give effect to this resolution and all acts, done by and with the authority of the Board of

Directors of the Company in this matter be and are hereby also conrmed and ratied.”

6. As an Ordinary Resolution

“RESOLVED that pursuant to Section 148 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Audit

and Auditors) Rules, 2014 (including any statutory modications or re-enactment thereof, for the time being in force), the remuneration of Rs.

1,45,000/- (Rupees One Lakh Forty Five Thousand only) plus applicable taxes and reimbursement of travelling and other incidental expenses

to be incurred by them in the course of cost audit and payable to M/s. N. D. Birla & Co., Cost Accountants (Firm Registration No. 000028),

appointed as the Cost Auditors by the Board of Directors of the Company on the recommendation of the Audit Committee, for conducting the staudit of the cost records of the Company for the nancial year ending on 31 March 2019, be and is hereby ratied and conrmed.”

“RESOLVED FURTHER that the Board of Directors of the Company be and is hereby authorised to do all acts and take all such steps as may be

necessary, proper or expedient to give effect to this resolution.”

Registered Office'Park Plaza'71, Park StreetKolkata-700 016

thDate: 18 May 2018

By Order of the Board of Directors

N. K. SethiaCompany Secretary


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NOTES

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING IS ENTITLED TO APPOINT A PROXY/PROXIES TO

ATTEND AND VOTE ON HIS/HER BEHALF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. The Instrument appointing the

Proxy, in order to be effective, should be duly completed, stamped, dated and signed and deposited at the Registered Office of the

Company or the Registrar & Share Transfer Agent, C. B. Management Services Pvt. Limited, P- 22, Bondel Road, Kolkata – 700 019,

not less than 48 hours before commencement of the Annual General Meeting (AGM).

A person can act as a proxy on behalf of Members not exceeding fifty and holding in the aggregate not more than ten percent of the

total Share Capital of the Company carrying voting rights. A Member holding more than ten percent of the total Share Capital of the

Company carrying voting rights may appoint a single person as Proxy and such person shall not act as a proxy for any other person

or shareholder.

The proxy holder shall prove his identity at the time of attending the Meeting.

2. The Explanatory Statement pursuant to Section 102(1) of the Companies Act, 2013 with respect to Special Business set out in the Notice is

annexed hereto.

3. Corporate Members are requested to send to the Company/Registrar & Share Transfer Agent, a duly certied copy of the Board Resolution

pursuant to Section 113 of the Companies Act, 2013 / Power of Attorney authorising their representative to attend and vote at the AGM.

th th4. The Register of Members and Share Transfer Books of the Company will remain closed from 7 September 2018 to 13 September 2018 (both

days inclusive), for determining the name of Members eligible for dividend on Equity Shares, if declared at the AGM.

5. Members are requested to produce the attendance slip duly signed as per the specimen signature recorded with the Company for admission

into the Meeting Hall.

6. Members who hold shares in dematerialised form are requested to furnish their Client ID and DP ID Nos. for easy identication of attendance

at the Meeting.

7. Members holding shares in physical form are requested to inform the Company/Registrar & Share Transfer Agent, the changes, if any, in their

address or Bank particulars so that the same can be incorporated in the Dividend Instrument and in case their shares are held in

dematerialised form, this information should be furnished to their respective Depository Participants immediately.

8. Members who are holding Shares in physical form and desire to avail the facility of Electronic Credit of Dividend are requested to furnish their

Bank particulars, together with a photocopy of blank cancelled cheque for verication of MICR Code, to the Company or its Registrar & Share

Transfer Agent, C. B. Management Services Pvt. Limited. Members holding Shares in electronic form are requested to furnish the said

information to their respective Depository Participants.

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all companies are to mandatorily use the Bank

Account details furnished by the Depositories for crediting dividends. Dividend will be credited to the Member's Bank Account through NECS

wherever complete core banking details are available with the Company. In cases, where the core banking details are not available, dividend

warrants will be issued to the Members with Bank details printed thereon as available in the Company's records.

9. Members, who have not dematerialised their shares as yet, are advised to have their shares dematerialised to avail the benets of paperless

trading as well as easy liquidity as the trading in shares of the Company is under compulsory dematerialised form.


10. Members holding Shares of the Company in physical form through multiple folios in identical names or joint accounts in the same order of

names are requested to consolidate their shareholding into single folio, by sending their original share certicates along with a request letter

to consolidate their shareholding into one single folio, to the Registrar & Share Transfer Agent of the Company.

11. In all correspondence with the Company/Registrar & Share Transfer Agent, Members are requested to quote their Folio Number and in case

their shares are held in the dematerialised form, they must quote their DP ID and Client ID Number.

12. Dividend on Equity Shares as recommended by the Board, if declared at the Annual General Meeting, will be paid:

a) to those Members whose names appear in the Register of Members of the Company, after giving effect to all valid share transfers in thphysical form lodged with the Company on or before 6 September 2018, and

b) in respect of shares held in electronic form, to those “deemed members” whose names appear in the statements of benecial

ownership furnished by National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) at the thend of business hours on 6 September 2018.

13. In accordance with the provisions of Sections 124 and 125 of the Companies Act, 2013, the unclaimed/unpaid dividend relating to nancial st thyear ended 31 March 2010 has been deposited on 13 September 2017 with the Investor Education and Protection Fund established by the

Central Government.

Pursuant to the provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the thCompany has uploaded the details of unpaid and unclaimed dividends lying with the Company as on 4 September 2017 (date of last Annual

General Meeting) on its website and on the website of the Ministry of Corporate Affairs. Members are requested to note that dividends that are

not claimed within seven years from the date of transfer to the Company's Unpaid Dividend Account, will, as per Section 124 of the

Companies Act, 2013 (“Act”), be transferred to the Investor Education and Protection Fund (IEPF). Members who have a valid claim to any of

the unpaid/unclaimed dividends are requested to correspond with the Share Department of the Company at its Registered Ofce.

Shares on which dividend remains unpaid/unclaimed for seven consecutive years will also be transferred to the IEPF as per Section 124 (6)

of the Act, and the applicable Rules. During the year 2017-18, the Company has transferred 112,846 Equity Shares of Rs. 5/- each of the

Company, on which dividend has remained unclaimed/unpaid for a continuous period of 7 years or more, to the Demat Account of the

Investors Education and Protection Fund (IEPF) Authority, as per the applicable provisions of the Investor Education and Protection Fund

Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended.

Members are informed that once the unpaid/unclaimed dividend or the shares are transferred to IEPF, the same may be claimed by the

Members from the IEPF Authority by making an application in prescribed Form IEPF-5 online and sending the physical copy of the same duly

signed (as per the specimen signature recorded with the Company) along with requisite documents as specied in Form IEPF-5 which is

available on the website of IEPF at www.iepf.gov.in

14. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant

in securities market. Members holding shares in electronic form are, therefore, requested to submit their PAN to their respective Depository

Participant with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to

the Company/ Registrar & Share Transfer Agent of the Company.

15. Members are requested to contact the Company's Registrar & Share Transfer Agent, C. B. Management Services (P) Limited, P-22, Bondel

Road, Kolkata –700 019 Phone : (033) 22806692, 40116700 for reply to their queries/redressal of complaints, if any, or contact the Company

Secretary at the Registered Ofce of the Company (Phone: (033) 4031 3200, Email: [email protected]).


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st16. Members who wish to obtain any information on the Company or the Accounts for the nancial year ended 31 March 2018 may send their

queries to the Company Secretary at the Registered Ofce of the Company at least 10 working days before the AGM.

17. Pursuant to Section 72 of the Companies Act, 2013 and Rules made thereunder, Members holding shares in the physical form and desirous of

making/changing nomination in respect of their shareholdings in the Company, are requested to submit the prescribed Form No. SH-13 and

SH-14, as applicable for this purpose to the Company's Registrar & Share Transfer Agent.

th18. Copies of the Annual Report 2017-18, Notice of the 58 AGM of the Company, inter alia, indicating the process and manner of e-voting along

with Attendance Slip and Proxy Form are being sent by electronic mode to all the Members whose email addresses are registered with the

Company/Depositary Participant(s) for communication purposes, unless any Member has requested for a hard copy of the same. For

Members who have not registered their email addresses, physical copies of the Annual Report 2017-18, Notice of the AGM of the Company,

inter alia, indicating the process and manner of e-voting along with Attendance Slip and Proxy Form are being sent by the permitted mode.

19. Members are requested to bring their copy of the Annual Report to the Meeting.

th20. Members may note that the Notice of the 58 AGM and the Annual Report 2017-18 will also be available on the Company's website

www.kanoriachem.com. The Register of Contracts or Arrangements in which Directors are interested, maintained under Section 189 of the

Companies Act, 2013, the Register of Directors and Key Managerial Personnel and their shareholding, maintained under Section 170 of the

Companies Act, 2013 read with Rules made thereunder will be available for inspection at the AGM. Members who require communication in

physical form in addition to e-communication, may write to us at [email protected]

21. All documents referred to in the accompanying notice will be open for inspection at the AGM and such documents will also be available for

inspection in physical or in electronic form at the registered ofce and copies thereof shall also be available for inspection in physical or

electronic form at the corporate ofce of the Company (address: Kanoria Chemicals & Industries Limited, Indra Prakash Building, 2nd Floor,

21, Barakhamba Road, New Delhi – 110 001) on any working day between 11.00 A.M. and 1.00 P.M. till the date of the Annual

General Meeting.

22. Members who have not registered their e-mail address so far, are requested to register their e-mail address for receiving all communications

from the Company electronically.

23. The Directors to be appointed/re-appointed at the AGM have furnished the requisite consent/declarations as required under the

applicable laws.

24. Voting through Electronic Means:

i. In compliance with provisions of Section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management and Administration)

Rules, 2014 as amended and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the

Company is pleased to provide to its Members, the facility to exercise their right to vote on resolutions proposed to be considered at the th58 Annual General Meeting (AGM) by electronic means and the business may be transacted through e-voting services. The facility of

casting the votes by the Members using an electronic voting system from a place other than venue of the AGM (“remote e-voting”) will

be provided by National Securities Depository Limited (NSDL).

ii. The facility for voting through Polling Paper shall be made available at the AGM and the Members attending the Meeting who have not

cast their vote by remote e-voting shall be able to exercise their voting right at the Meeting through Polling Paper. The facility to vote by

electronic voting system will not be provided at the AGM.

iii. The Members who have cast their vote by remote e-voting prior to the AGM may also attend the AGM but shall not be entitled to cast their

vote again.

th th iv. The remote e-voting period commences on 10 September 2018 (at 9.00 A. M.) and ends on 12 September 2018 (at 5.00 P. M.). During

this period, Members of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date i.e.th6 September, 2018, may cast their vote by remote e-voting. The remote e-voting module shall be disabled by NSDL for voting thereafter

and the facility shall be blocked therewith. Once the vote on a resolution is cast by the Member, the Member shall not be allowed to

change it subsequently.

v. The details of the process and manner for remote e-voting are explained herein below:

Step 1: Log-in to NSDL e-Voting system at https://www.evoting.nsdl.com/

Step 2: Cast your vote electronically on NSDL e-Voting system.

Details on Step 1 are mentioned below:

How to Log-in to NSDL e-Voting website?

1. Visit the e-Voting website of NSDL. Open web browser by typing the following URL: https://www.evoting.nsdl.com/ either on a

Personal Computer or on a mobile.

2. Once the home page of e-Voting system is launched, click on the icon “Login” which is available under 'Shareholders' section.

3. A new screen will open. You will have to enter your User ID, your Password and a Verication Code as shown on the screen.

Alternatively, if you are registered for NSDL eservices i.e. IDEAS, you can log-in at https://eservices.nsdl.com/ with your existing

IDEAS login. Once you log-in to NSDL eservices after using your log-in credentials, click on e-Voting and you can proceed to Step 2 i.e.

Cast your vote electronically.

4. Your User ID details are given below :

Manner of holding Shares i.e. Demat (NSDL or CDSL) or Physical Your User ID is:

For Members who hold shares in demat account with NSDL. 8 Character DP ID followed by 8 Digit Client ID For example, if your DP ID is IN300*** and Client ID is 12****** then your user ID is IN300***12******

For Members who hold shares in demat account with CDSL. 16 Digit Beneciary ID For example, if your Beneciary ID is 12************** then your user ID is 12**************

For Members holding shares in Physical Form. EVEN Number followed by Folio Number registered with the Company. For example, if EVEN is 101456 and folio number is 001*** then user ID is 101456001***

5. Your password details are given below:

a. If you are already registered for e-Voting, then you can use your existing password to login and cast your vote.

b. If you are using NSDL e-Voting system for the rst time, you will need to retrieve the 'initial password' which was

communicated to you. Once you retrieve your 'initial password', you need to enter the 'initial password' and the system will

force you to change your password.

c. How to retrieve your 'initial password'?

i. If your email ID is registered in your demat account or with the Company, your 'initial password' is communicated to you

on your email ID. Trace the email sent to you from NSDL from your mailbox. Open the email and open the attachment i.e.

a .pdf le. Open the .pdf le. The password to open the .pdf le is your 8 digit client ID for NSDL account, last 8 digits of

client ID for CDSL account or folio number for shares held in physical form. The .pdf le contains your 'User ID' and your

'initial password'.

ii. If your email ID is not registered, your 'initial password' is communicated to you on your postal address.


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6. If you are unable to retrieve or have not received the “initial password” or have forgotten your password:

a. Click on “Forgot User Details/Password?” (If you are holding shares in your demat account with NSDL or CDSL) option

available on www.evoting.nsdl.com

b. “Physical User Reset Password?” (If you are holding shares in physical mode) option available on www.evoting.nsdl.com

c. If you are still unable to get the password by aforesaid two options, you can send a request at [email protected] mentioning

your demat account number/folio number, your PAN, your name and your registered address.

7. After entering your password, click on Agree to “Terms and Conditions” by selecting on the check box.

8. Now, you will have to click on “Login” button.

9. After you click on the “Login” button, Home page of e-Voting will open.

Details on Step 2 are mentioned below:

How to cast your vote electronically on NSDL e-Voting system?

1. After successful login at Step 1, you will be able to see the Home page of e-Voting. Click on e-Voting. Then, click on Active

Voting Cycles.

2. After click on Active Voting Cycles, you will be able to see all the companies “EVEN” in which you are holding shares and

whose voting cycle is in active status.

3. Select “EVEN” of Kanoria Chemicals & Industries Limited.

4. Now you are ready for e-Voting as the Voting page opens.

5. Cast your vote by selecting appropriate options i.e. assent or dissent, verify/modify the number of shares for which you wish

to cast your vote and click on “Submit” and also “Conrm” when prompted.

6. Upon conrmation, the message “Vote cast successfully” will be displayed.

7. You can also take the printout of the votes cast by you by clicking on the print option on the conrmation page.

8. Once you conrm your vote on the resolution, you will not be allowed to modify your vote.

General guidelines for shareholders

1. Institutional shareholders (i.e. other than individuals, HUF, NRI, etc.) are required to send a scanned copy (PDF/JPG Format)

of the relevant Board Resolution/Authority letter etc. with attested specimen signature of the duly authorized signatory(ies)

who are authorized to vote, to the Scrutinizer by email to [email protected] with a copy marked to

[email protected]

2. It is strongly recommended not to share your password with any other person and take utmost care to keep your password

condential. Login to the e-voting website will be disabled upon ve unsuccessful attempts to key in the correct password. In

such an event, you will need to go through the “Forgot User Details/Password?” or “Physical User Reset Password?” option

available on www.evoting.nsdl.com to reset the password.

3. In case of any queries, you may refer to the Frequently Asked Questions (FAQs) for Shareholders and e-voting user manual for

Shareholders available at the download section of www.evoting.nsdl.com or call on toll free no.: 1800-222-990 or send a

request at [email protected]

vi. You can also update your mobile number and e-mail id in the user prole details of the folio which may be used for sending future

communication(s).

vii. The voting rights of Members shall be in proportion to their shares of the paid up Equity Share Capital of the Company as on the cut-off thdate i.e. 6 September 2018.

viii. Any person, who acquires shares of the Company and becomes Member of the Company after dispatch of the Notice of AGM and holding thshares as on the cut-off date i.e. 6 September 2018, may obtain the login ID and password by sending a request at [email protected]

or [email protected] or [email protected] mentioning his/her Folio Number/DPID and Client ID. However, if you are already

registered with NSDL for remote e-voting then you can use your existing user ID and password for casting your vote. If you forgot your

password, you can reset your password by using “Forgot User Details/Password” option available on www.evoting.nsdl.com or contact

NSDL at the toll free no.: 1800-222-990.

ix. A person, whose name is recorded in the Register of Members or in the Register of Benecial Owners maintained by the depositories as

on the cut-off date only shall be entitled to avail the facility of remote e-voting as well as voting at the AGM through Polling Paper.

x. Shri H. M. Choraria (Membership No. FCS 2398), practising company secretary and proprietor of H. M. Choraria & Co., Kolkata has been

appointed as the Scrutinizer to scrutinize the voting and remote e-voting process in a fair and transparent manner.

xi. The Chairman shall, at the AGM, at the end of discussion on the resolutions on which voting is to be held, allow voting with the

assistance of scrutinizer, by use of Polling Paper for all those Members who are present at the AGM but have not cast their votes by

availing the remote e-voting facility.

xii. The Scrutinizer shall after the conclusion of voting at the AGM, will rst count the votes cast at the Meeting and thereafter unblock the

votes cast through remote e-voting in the presence of at least two witnesses not in the employment of the Company and shall make, not

later than 48 hours of the conclusion of the AGM, a consolidated Scrutinizer's Report of the total votes cast in favour or against the

proposed resolutions and provide the said Report to the Chairman or any Director authorized by him in writing, who shall countersign the

same and declare the result of the voting forthwith.

xiii. The Notice of the AGM shall be placed on the website of the Company and NSDL. The results declared along with the Report of the

Scrutinizer shall be placed on the website of the Company and on the website of NSDL immediately after the declaration of result by the

Chairman or any Director authorized by him in writing and also shall be displayed on the notice Board of the Company at its Registered

Ofce and Corporate Ofce. The results shall also be immediately forwarded to the BSE Limited and the National Stock Exchange of

India Limited, where the shares of the Company are listed.

25. Additional information, pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in respect of

Shri S. V. Kanoria seeking appointment on retirement as rotational Director is given as under, while in respect of other Directors seeking

appointment/re-appointment it is provided in the Explanatory Statement:

Shri S. V. Kanoria

st Shri S. V. Kanoria (DIN: 02097441), aged about 36 years is the Wholetime Director of the Company with effect from 1 April 2016. He retires by throtation at the 58 Annual General Meeting of the Company under Section 152 of the Companies Act, 2013 and, being eligible, has offered

himself for re-appointment as a Director of the Company.

Shri S. V. Kanoria, an MS in Computer Science from the University of Illinois – Urbana Champaign, USA, has about 14 years of commercial,

industrial, managerial and operational experience.


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He attended three Board Meetings out of the four Board Meetings held during the year 2017-18.

He is a Member of the Stakeholders Relationship Committee and Finance Committee of the Board of Directors of the Company. He does not

hold any Committee chairmanship/ membership in any other company.

He is a Director in the following companies:

Name of the Company Position held

KPL International Limited Director

Vardhan Finvest Limited Director

India General Trading Co. Limited Director

R V Investment & Dealers Limited Director

PHD Chamber of Commerce and Industry Director

Breaking Wave Software Private Limited Director

Humbleschool Private Limited Director

He holds 556,440 Equity Shares in the Company. He is relative of Shri R.V. Kanoria, Managing Director and Smt. Madhuvanti Kanoria, a

Director of the Company.

The Company has received from Shri S. V. Kanoria intimation in Form DIR 8 declaring that he is not disqualied from being appointed as a

Director under Section 164 of the Companies Act, 2013.

The appointment of Shri S. V. Kanoria as a Director requires approval of the shareholders as per the provisions of the Companies Act, 2013.

Hence, Item No. 3 of the Notice is placed for your approval in the interest of the Company.

Except Shri S. V. Kanoria, Shri R.V. Kanoria, Managing Director and Smt. Madhuvanti Kanoria, Director of the Company and their relatives as

shareholders of the Company, none of the other Directors and Key Managerial Personnel of the Company and their relatives is concerned or

interested, nancially or otherwise, in the appointment of Shri S. V. Kanoria as a Director of the Company.

Explanatory Statement pursuant to Section 102 of the Companies Act, 2013

Re: Item No. 4

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in its meeting held on th18 May, 2018, appointed Shri Sidharth Kumar Birla (DIN: 00004213) as an Additional Director under Section 161 of the Companies Act,

2013 (“the Act”) and also as an Independent Director, not liable to retire by rotation, for a period of 5 consecutive years with effect fromth18 May, 2018, subject to approval of the shareholders. Since, in terms of Section 161 of the Act, Shri Sidharth Kumar Birla holds ofce upto

the 58th Annual General Meeting, his appointment as an Independent Director as above needs approval of the shareholders at the ensuing

58th Annual General Meeting of the Company.

Shri Sidharth Kumar Birla has given his consent to act as Director and declared that he is eligible for appointment as a Director and that he

meets the criteria of independence as prescribed under sub-section (6) of Section 149 of the Act and the SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015 (“Listing Regulations”).

In the opinion of the Board, Shri Sidharth Kumar Birla fullls the conditions for appointment as Independent Directors as specied in the Act

and the Listing Regulations and he is also independent of the Management.

Shri Sidharth Kumar Birla, aged about 61 years completed his B.Sc. (Hons) degree in Physics from Calcutta University and holds an MBA

from IMD, Switzerland. He is also an Alumnus of Harvard Business School. He is Past President of FICCI, an erstwhile nominee (3 terms) of

the Central Government on the central council of the Institute of Chartered Accountants of India (ICAI), and presently an independent director

of the ICSI Institute of Insolvency Professionals (ICSI-IIP).

His areas of expertise and experience include Corporate Governance, Strategic Issues, Company Law matters, Corporate Financial

Structuring, Operating Financial Management, etc.

He is a Director in the following companies:


Xpro India Limited Chairman (Wholetime Director)

Digjam Limted (Formerly Digjam Textiles Ltd.) Chairman

Xpro Global Limited Director

iPro Capital Limited Director

Central India General Agents Ltd. Director

Birla Brothers. Pvt. Ltd. Director

ICSI Institute of Insolvency Professionals (Formerly ICSI Insolvency Professionals Agency) Director

Xpro Global Pte Ltd., Singapore Director

Alpha Capital Resources Pte Ltd., Singapore Director

He holds the following Committee chairmanship/ membership in other companies:

Name of the Company Name of the Committee Position held

Xpro India LimitedRemuneration and Nomination Committee Member

Committee of Directors Member

Digjam Limted (Formerly Digjam Textiles Ltd.)Remuneration and Nomination Committee Member

Committee of Directors Chairman

Birla Brothers. Pvt. Ltd. Audit Committee Member

He holds 25 Equity Shares of the Company. He is not related to any Director or Key Managerial Personnel of the Company.

Copy of the draft letter for appointment of Shri Sidharth Kumar Birla as an Independent Director setting out the terms and conditions would be

available for inspection without any fee by the shareholders at the Registered Ofce of the Company during normal business hours on any

working day between 11.00 A. M. and 1.00 P. M. till the date of AGM of the Company.

The appointment of Shri Sidharth Kumar Birla as an Independent Director requires approval of the shareholders as per the provisions of the

Companies Act, 2013. Hence, the Ordinary Resolution set out in Item No. 4 of the Notice is placed for your approval. Your Directors

recommend passing of the said resolution in the interest of the Company.

Except Shri Sidharth Kumar Birla and his relatives as shareholders of the Company, none of the other Directors and Key Managerial Personnel

of the Company and their relatives is concerned or interested, nancially or otherwise, in the proposed Ordinary Resolution.


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The above information in respect of Shri Sidharth Kumar Birla may also be treated as information pursuant to the SEBI (Listing Obligations

and Disclosure Requirements) Regulations, 2015 for his appointment as a Director of the Company.

Re: Item No. 5

th The previous term of Shri R.V. Kanoria (DIN: 00003792) as Managing Director of the Company expired by efux of time on 9 January, 2018.

Shri R.V. Kanoria, aged about 63 years is an industrialist and currently the Chairman & Managing Director of the Company. He is a science

graduate and holds MBA (Hons) degree from Switzerland. He possesses over four decades of industrial, managerial, administrative and thcommercial experience. He was appointed a Member of the Board of the Company on 9 November 1982.

He is the Chairman/Member of the following Committees of the Board of Directors of the Company:

Ÿ Audit Committee - Member

Ÿ Nomination and Remuneration Committee - Member

Ÿ Corporate Social Responsibility Committee - Member

Ÿ Finance Committee - Chairman

He attended all the four Board Meetings held during the year 2017-18.

He is on the Board of Directors of the following companies:


Nestle India Limited Director

J. K. Paper Limited Director

Ludlow Jute & Specialities Limited Director

KPL International Limited Director

Vardhan Limited Director

R.V. Investment & Dealers Limited Director

Kirtivardhan Finvest Services Limited Director

APAG Holding AG, Switzerland Chairman

APAG Elektronik AG, Switzerland Chairman

APAG Elektronik Corp., Canada Director

He holds the following Committee chairmanship/ membership in other companies:

Name of the Company Name of the Committee Position held

Nestle India Limited

Audit Committee Member

Stakeholders Relationship Committee Member

Nomination and Remuneration Committee Chairman

J K Paper Limited

Audit Committee MemberStakeholders Relationship Committee ChairmanNomination and Remuneration Committee MemberCommittee of Directors Member

Ludlow Jute & Specialities Limited Corporate Social Responsibility Committee Member

KPL International Limited

Audit Committee Chairman

Share Transfer Committee Member

Nomination and Remuneration Committee Member

R V Investment & Dealers LimitedStakeholders Relationship Committee Member

Corporate Social Responsibility Committee Member

Vardhan Limited Corporate Social Responsibility Committee Member

th On the recommendation made by the Nomination and Remuneration Committee in its Meeting held on 14 November 2017, the Board of thDirectors of the Company at its Meeting held on 14 November 2017, re-appointed Shri R.V. Kanoria as the Managing Director of the Company

thfor a period of further three years with effect from 10 January 2018, subject to the approval of the shareholders of the Company and other

necessary approvals, if any, on the terms and conditions including remuneration as recommended by the Nomination and Remuneration thCommittee and as set out in the Agreement dated 16 December 2017, entered into between the Company and Shri R.V. Kanoria. The main

terms and conditions of the said Agreement are as follows:-

REMUNERATION

Shri R.V. Kanoria, in consideration of his services will be entitled to the following by way of remuneration during his tenure of three years theffective from 10 January 2018:

(A) Salary

Rs. 950,000/- (Rupees Nine Lakh Fifty Thousand only) per month. The increment will be as decided by the Board of Directors, based on the

recommendation of the Nomination and Remuneration Committee.

(B) Commission

At the rate of 2% (Two percent) of net prots of the Company for each nancial year, computed in the manner laid down under the Companies

Act, 2013 and shall be payable on pro-rata basis for any broken period/nancial year.

(C) Perquisites

Shri R.V. Kanoria will be entitled to the following perquisites in addition to Salary and Commission, restricted to an amount equal to his Annual

Salary. Unless the context otherwise requires, perquisites are classied into three categories A, B and C as follows:-

CATEGORY – A

This will comprise of Residential accommodation or House Rent Allowance, Medical reimbursement, Leave/Holiday Travel, fees of Clubs and

Group Mediclaim/Personal Accident Insurance. These may be provided for as under:-

Housing

a) Residential Accommodation or Monthly House Rent Allowance at the rate of 60% of the Salary.

b) Expenses pertaining to use of Gas, Electricity, Water will be borne/reimbursed by the Company.

c) The Company will provide Furniture, Fixtures and Furnishings at the residence.

Medical Reimbursement

Reimbursement of actual Medical Expenses incurred in India and/or abroad including cost of Travel, Hospitalisation, Nursing Home and

Surgical charges for himself and family.

Leave/ Holiday Travel Reimbursement/Allowance

Reimbursement of all the expenses incurred during Leave/Holiday Travel period in respect of himself and family, while proceeding on

leave/holiday to any place in India or abroad, and/or Allowance, subject to a ceiling of one month's salary per annum. The entitlement in

respect of any one year, to the extent not availed of, shall be allowed to be accumulated upto the next two years.


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Club Fees

Fees of Clubs subject to a maximum of two Clubs. This will not include Admission and Life membership fees.

Group Mediclaim and Personal Accident Insurance

As per the rules of the Company.

CATEGORY - B

a) Contribution to Provident Fund as per the rules of the Company.

b) Gratuity at the rate of half month's salary for each completed year of service.

c) Leave with full pay or encashment thereof as per the rules of the Company.

In computing the monetary ceiling on perquisites as mentioned in Clause (2)(C) above, Company's contribution to Provident Fund, Gratuity

and encashment of leave at the end of the service shall not be taken into account.

CATEGORY - C

a) Conveyance facilities

The Company shall provide suitable conveyance facilities as may be required by the Managing Director.

b) Communication facilities

The Company shall provide free telephone, telefax facilities at his residence and other communication facilities as may be required.

Other Perquisites

Subject to the ceiling on remuneration as prescribed under the Companies Act, 2013 or any statutory modication(s) or re-enactment thereof

as may be applicable at the relevant time, the Managing Director may be given other allowances, benets and perquisites as the Board of

Directors may, from time to time, decide.

Perquisites shall be evaluated as per Income Tax Rules, 1962, wherever applicable and in the absence of any such rules, perquisites shall be

valued at actual cost.

Minimum Remuneration:

In the event of no prots or inadequacy of prots in any nancial year during the currency of tenure of ofce of Shri R.V.Kanoria, the Company

will pay him, in respect of such nancial year, minimum remuneration subject to the limits specied in Schedule V to the Companies Act,

2013 or any statutory modication(s) or re-enactment thereof as may be applicable at the relevant time.

General

Shri R.V.Kanoria will also be entitled to reimbursement of entertainment expenses actually and properly incurred in the course of the business

of the Company.

Shri R.V.Kanoria shall not, so long as he acts as the Managing Director of the Company, be paid any sitting fees for attending any meetings of

the Board or any Committee thereof.

Shri R.V. Kanoria shall not be subject to retirement by rotation and he shall not be reckoned as a Director for the purpose of determining the

rotation or retirement of Directors or in xing the number of Directors to retire but he shall ipso facto and immediately cease to be the

Managing Director if he ceases to hold the ofce of Director for any cause.

The terms and conditions of appointment and/or remuneration of Shri R.V.Kanoria may be altered and varied, from time to time, during his

tenure of appointment, in such manner as may be agreed to between the Board of Directors and Shri R.V.Kanoria, subject to the same being in

accordance and within the limits specied in Schedule V and other applicable provisions of the Companies Act, 2013, or any statutory

modication(s) or re-enactment thereof as may be applicable at the relevant time.

INSPECTION OF DOCUMENTS

th The Agreement entered into on 16 December, 2017 between the Company and Shri R.V. Kanoria is available for inspection by the

Shareholders of the Company at its Registered Ofce and copy thereof at the Corporate Ofce on any working day between 11.00 A.M. and

1.00 P.M. till the date of the Annual General Meeting and will also be available at the Annual General Meeting, without payment of fee.

Shri R.V. Kanoria holds 461,481 Equity Shares of the Company. He is relative of Smt. Madhuvanti Kanoria Director and Shri S. V. Kanoria,

Wholetime Director of the Company.

In terms of Schedule V to the Companies Act, 2013, the following information is given to the Shareholders

i. General Information

1. Nature of Industry Chemicals manufacturing and Solar Power generation

2. Date of commencement of Commercial Production 1965

3. Financial Performance

4. Foreign Investments or Collaborators There were 258 FI/FII/Foreign Nationals/ NRI/OCBs Shareholders holding 355.919 Equity Shares of the Company as on 31st March 2018. The Company does not have any foreign Collaborator.

Financial Year Total Income Operating Profit Profit before Tax Profit after Tax

2017-18 3,701 365 82 56

2016-17 3,500 512 100 187

2015-16 3,509 541 223 170

1. Background Details Shri R.V. Kanoria is an eminent industrialist in the Country. He is an MBA (Hons) from IMD Lausanne, Switzerland and an alumnus of The Wharton School of Business, USA (from where he completed an advanced management programme in 1998).

He has been instrumental in inuencing trade policy both at the national and global level and has over four decades of experience in the chemicals, textiles and jute industries. He has contributed to Industry and Society immensely. He has occupied various ofces in Industry Associations including the ofce of President of Federation of Indian Chambers of Commerce and Industry (FICCI) in 2011-12. He has also Chaired, Commission on Trade and Investment Policy of the International Chamber of Commerce, Paris during2008 - 2011. He has been Chairman of Confederation of Indian Textile Industry and Chairman of Indian Jute Mills' Association, Chairman of Indian Cotton Mills Federation. He has served on various Government Committees particularly on trade and investment.

2. Past Remuneration Year (Rs. in Million) 2017-18 18.08 2016-17 14.70 2015-16 12.92

3. Recognition or Awards Shri R.V. Kanoria has been awarded with "Swiss Ambassador's Award for Leadership and Business Ethics, 2013" and bestowed with the Distinction of Commander of the Order of Leopold II by the King of Belgium for his contribution to the development of business ties between India and Belgium.

4. Job prole and his suitability Shri R.V. Kanoria devotes whole time attention to the management of the affairs of the Company and exercises substantial powers of the management, subject to the superintendence, direction and control of the Board of Directors and also carries out duties as entrusted to him from time to time by the Board of Directors.

5. Remuneration Proposed Salary@Rs. 9,50,000/- p.m., Commission@2% of the net prots, computed in the manner laid down under the Companies Act, 2013, and other perquisites/allowances, as spelt out in the explanatory statement, hereinabove. His increment will be as decided by the Board of Directors.

ii. Information about the appointee


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(Rs. in Million)


15

6. Comparative remuneration prole with respect to industry, size of the company, prole of the position and person.

The remuneration proposed is in consonance with similar position in the industry.

7. Pecuniary relationship directly or indirectly with the Company or relationship with the managerial personnel, if any.

Except the remuneration to be received from the Company and to receive dividend declared, Shri R.V. Kanoria does not have any pecuniary relationship directly or indirectly with the Company. He is related to Shri S. V. Kanoria, Wholetime Director of the Company.

iii. Other Information

1. Reasons of Inadequacy of Prots

2. Steps taken or proposed to be taken for improvement

3. Expected increase in productivity and prots in measurable terms

The Company expects to earn adequate prots for payment of managerial remuneration. But, as an abundant caution for payment of minimum remuneration to Shri R.V. Kanoria, in case of no prot or inadequate prot in any particular year during his tenure, this information is provided to the shareholders.

The appointment and remuneration of Shri R.V. Kanoria, xed in accordance with the applicable provisions of the Companies Act, 2013, is

subject to approval of the shareholders. Hence, the Special Resolution set out in Item No. 5 of the Notice is placed for your approval. Your

Directors recommend passing of the said resolution in the interest of the Company.

Except Shri R.V. Kanoria, Smt. Madhuvanti Kanoria and S. V. Kanoria, Directors of the Company and their relatives as shareholders of the

Company, none of the other Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, nancially

or otherwise, in the proposed Resolution.

The above information in respect of Shri R.V. Kanoria may also be treated as information, pursuant to the SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015, for his re-appointment as the Managing Director of the Company.

Re: Item No. 6

The Board of Directors, on the recommendation of the Audit Committee, has considered and approved the appointment of M/s. N. D. Birla &

Co., Cost Accountants (Firm Registration No. 000028), as the Cost Auditors to conduct the audit of the cost records of the Company for the stnancial year ending 31 March 2019 at a remuneration of Rs. 1,45,000/- (Rupees One Lakh Forty Five Thousand only) plus applicable taxes

and reimbursement of travelling and other incidental expenses to be incurred by them in the course of cost audit.

Pursuant to Section 148 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost

Auditors has to be ratied by the shareholders of the Company.

Accordingly, the Ordinary Resolution set out as Item No. 6 of the Notice is placed for ratication of the remuneration of the Cost Auditors in

terms of Section 148 of the Companies Act, 2013.

None of the Directors or Key Managerial Personnel (KMPs) of the Company either directly or through their relatives is in any way, concerned or

interested, whether nancially or otherwise, in the proposed Resolution.

Registered Office'Park Plaza'71, Park StreetKolkata-700 016

thDate: 18 May 2018

By Order of the Board of Directors

N. K. SethiaCompany Secretary


16

‘Shripati Singhania Hall’,Rotary Sadan

94/2 Chowringhee RoadKolkata- 700 020

map to the venue of theannual general meeting

[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014]

Form No.MGT-11

CIN : L24110WB1960PLC024910 Name of the Company : KANORIA CHEMICALS & INDUSTRIES LIMITEDRegistered Ofce : “Park Plaza”, 71, Park Street, Kolkata - 700 016

Name of the Member (s) :

Registered Address :

E-mail Id :

Folio / DP ID & Client ID No. :

I/We, being the member(s), holding ........................................................Shares of the above named company, hereby appoint

1. Name: ....................................................................................................... Address:..........................................................................................................

E-mail Id:................................................................................................... Signature:................................................................................., or failing him

2. Name: ....................................................................................................... Address:..........................................................................................................

E-mail Id:................................................................................................... Signature:................................................................................., or failing him

3. Name: ....................................................................................................... Address:..........................................................................................................

E-mail Id:................................................................................................... Signature:........................................................................................................

th thas my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 58 Annual General Meeting of the Company, to be held on Thursday, the 13 September 2018 at 3.00 P.M. at Shripati Singhania Hall in Rotary Sadan, 94/2, Chowringhee Road (near to Nehru Children Museum), Kolkata - 700 020 and at any adjournment thereof in respect of such resolutions as are indicated below:

Resolution No. Resolutions

Ordinary Business

1.Adoption of the Audited Financial Statements (including the Consolidated Financial Statements) of the Company for the nancial year

stended 31 March 2018 and the Reports of the Board of Directors and Auditors thereon.

2. stDeclaration of Dividend on Equity Shares for the nancial year ended 31 March 2018.

3.Appointment of a Director in place of Shri S. V. Kanoria (DIN: 02097441), who retires by rotation and being eligible, offers himselffor re-appointment.

Special Business

4. Appointment of Shri Sidharth Kumar Birla (DIN: 00004213) as an Independent Director of the Company.

5. Special Resolution for re-appointment of Shri R. V. Kanoria (DIN 00003792) as the Managing Director of the Company.

6. Ratication of remuneration of the Cost Auditors for the nancial year 2018-19.

Signed this.............................................day of.............................................2018

Signature of Shareholder(s) ..................................................................................

Signature of Proxy holder(s) ..................................................................................

Note: This form of proxy in order to be effective should be duly completed, stamped, dated and signed and deposited at the Registered Office of the Company/Registrar & Share Transfer Agent, C.B. Management Services (P) Limited, P-22 Bondel Road, Kolkata-700 019, not less than 48 hours before the commencement of the Annual General Meeting.

Afx Revenue Stamp


PROXY FORM

KANORIA CHEMICALS & INDUSTRIES LIMITED CIN: L24110WB1960PLC024910

Registered Office: “Park Plaza”, 71, Park Street, Kolkata – 700 016 Phone: (033) 4031 3200, Fax: (033) 4031 3220

email: [email protected] Website: www.kanoriachem.com

58th Annual General Meeting

ATTENDANCE SLIP

1. Name(s) of Member(s) : Including joint holders, if any

2. Registered address of the Sole/ : First named Member 3. DP ID No. & Client ID No./ : Registered Folio No. 4. No. of Shares held :

I hereby record my presence at the 58th Annual General Meeting of the Company being held at Shripati Singhania Hall in Rotary Sadan, 94/2, Chowringhee Road (near to Nehru Children Museum), Kolkata - 700 020, on Thursday, the 13th September 2018 at 3.00 P. M.

Signature of the Shareholder/Proxy present …………………………………….……

Notes :

1. Shareholder/Proxy holder wishing to attend the meeting must bring the Attendance Slip and handover the same duly signed at the entrance of the meeting hall.

2. PLEASE CUT HERE AND BRING THE ABOVE ATTENDANCE SLIP TO THE MEETING ---------------------------------------------------------------------------------------------------------------------

ELECTRONIC VOTING Remote Electronic voting (Remote e-voting) facility is being provided in respect of the Resolutions proposed at the 58th AGM, in accordance with Section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management and Administration) Rules, 2014 as amended and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Please see Note No. 24 to the Notice dated 18th May, 2018 convening the AGM for the procedure with respect to e-voting. Your remote e-voting user ID and password are provided below:

Remote e-voting Event Number (EVEN)

User ID Password

Note: The remote e-voting period commences on 10th September 2018 (at 9.00 A. M.) and ends on 12th September 2018 (at 5.00 P. M.).

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